Adani announces mega demerger scheme, to list Adani Transmissions
The reorganization will be initiated by 1 April subject to regulatory and other approvals and is expected to unlock shareholder value
Adani Enterprises Ltd, the holding company of the Adani group, on Thursday said its board had approved a scheme to restructure its businesses and list a group company.
The reorganization will be initiated by 1 April subject to regulatory and other approvals and is expected to unlock shareholder value by eliminating the holding company’s discount. Gautam Adani and the promoter group hold a 75% stake in Adani Enterprises. The remaining is with public of which institutions hold 21.2%. Of the 21.2%, foreign institutional investors hold 18.61%.
The port business of Adani Enterprises will be folded into Adani Ports Special Economic Zone Ltd (APSEZ) and its power business will be merged with Adani Power Ltd as part of the restructuring, the company said. The power transmission business will be run by Adani Transmissions (India) Ltd (ATL), which the group plans to list on the BSE and the National Stock Exchange, Adani Enterprises said in a statement.
The rearrangement will simplify the group’s corporate structure and provide shareholders of Adani Enterprise direct holding in the operating companies. The listing of Adani Transmissions, which has over 5,000 circuit km of power lines in western, northern and central India, is expected to unlock value.
The share price of Adani Enterprises rose by 8.66% to ₹ 634.55 on the BSE after it said it will restructure its businesses.
Adani Transmissions is currently acquiring 100% of the outstanding equity share capital of Adani Transmission from Adani Power and Adani Power Maharashtra Ltd. It is also acquiring 100% of the outstanding equity share capital of Maharashtra Eastern Grid Power Transmission Co. Ltd from Adani Enterprises. The acquisition will have to be approved by shareholders, it said.
Further, Adani Mining Pvt. Ltd will be folded into Adani Enterprises.
“Demerger of the port undertaking of AEL comprising the undertaking, businesses, activities, operations, assets (moveable and immoveable) and liabilities pertaining to the Belekeri port in Karnataka and the investment of AEL in APSEZ into APSEZ," the company said in a media statement on Friday.
After the ports undertaking of Adani Enterprises is merged into APSEZ, the latter will issue and allot new equity shares to the equity shareholders of Adani Enterprises in the ratio of 14,123 shares in APSEZ for every 10,000 shares in Adani Enterprises.
Adani owns and operates six ports and terminals—Mundra, Dahej and Hazira in Gujarat, Dhamra in Odisha, Mormugao in Goa and Visakhapatnam in Andhra Pradesh. Mundra is the largest port in India, handling more than 100 million tonnes of cargo handling in 2013-14. Adani is also developing ports at Tuna Tekra and Kandla in Gujarat and Ennore in Tamil Nadu.
Adani Power, too, will issue and allot new shares to shareholders of Adani Enterprises in the ratio of 18,596 shares in Adani Power for every 10,000 shares in Adani Enterprises. Adani Power is the largest private thermal power producer in India with an installed capacity of 9,280 MW. Its three power projects are located in Gujarat, Maharashtra and Rajasthan.
Similarly, Adani Transmissions will issue and allot new equity shares in the ratio of one share for one in Adani Enterprises, the company said.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!