Billionaire Gautam Adani is raising $2.5 billion from a deal that includes the sale of a minority stake in his renewables business to French energy giant Total SE, a transaction that may help the tycoon cut group debt.
Paris-based Total will acquire 20% of Adani Green Energy Ltd. and a board seat as well as a 50% stake in a portfolio of operating solar assets with 2.35 gigawatts capacity, the company said Monday in a statement, confirming an earlier report by Bloomberg News. But shares of Adani Green have more than quadrupled in value in the past year in Mumbai, giving the company a market value of about $20 billion.
Adani is the latest Indian tycoon to raise money by selling a piece of his empire to an overseas partner, as rising consumption of electricity to fuels and mobile data makes the country an attractive destination for some investors. Last year, Mukesh Ambani — India’s richest man — mopped up about $27 billion from Facebook Inc., Google and private-equity investors for his technology and retail ventures.
“Primarily, this fund infusion will help Adani lower its leverage,” said Chakri Lokapriya, chief executive officer at TCG Asset Management in Mumbai. “Thanks to a series of deals, Adani is highly leveraged at this point of time.”
The Adani group, which started off as a commodities trader in 1988, has grown rapidly to become India’s top private-sector port operator and power generator. In 2019, Adani started focusing on airports, and now he’s trying to enter sectors including data storage and financial services.
The group had an overall gross debt of ₹ 1.74 lakh crore ($24 billion) as of end-September, according to a November report from Credit Suisse. Adani Enterprises Ltd., the biggest listed company in his group, had about $1.7 billion of consolidated debt as of March 2020, according to Brickwork Ratings.
The latest transaction marks Total’s third commitment to the Adani group. In 2019, the French firm spent $600 million to buy a 37.4% stake in Adani Gas Ltd., now called Adani Total Gas, and in February last year, acquired 50% of a solar assets joint venture.
“India is the right place to put into action our energy transition strategy based on two pillars: renewables and natural gas,” Total CEO Patrick Pouyanne said in the statement.