Abu Dhabi-based company IHC has recently increased its stake in one of the significant subsidiaries of Adani Group, Adani Enterprise Limited, to about 5% a few months after the Adani Crisis. Since then, it has been buying stocks of Adani Group from the open market. The value that it presently holds is more than 1.7 billion USD. IHC first invested in AEL in May 2022. The company had bought around 3.53 % of the shares for 1 billion USD. The value now stands at 1.2 billion USD. The firm has increased its holding to around 5.04% by purchasing shares from the open market. This investment is currently more than 500 million USD. This is way more than what the company has expected to fetch from the stock purchase in Adani Green Energy and Adani Energy Solutions.
IHC currently holds 1.41% of Adani Energy Solutions and 1.26% of Adani Green Energy, respectively. The value of this stake is around USD 380 million. IHC recently announced that the stock purchase was part of its portfolio balancing strategy. It has also mentioned that it is eager to continue its partnership with Adani Group, mainly because of the conglomerate’s portfolio diversification strategy and the excellent business it is currently doing in different parts of the world. IHC has strong beliefs in the incubation model of the company. It is motivated by the inherent strength of green hydrogen, airports, transmission centres, and other infrastructures that come under the jurisdiction of the Adani Group. IHC also strongly believes that the company will have a big role in capitalising on India’s robust growth journey. IHC was also highly motivated to invest in the Adani Group after the allegations of the Adani Crisis were dropped by the Supreme Court.
Multiple reasons caused IHC to increase its stake in Adani Enterprises. One of the most important factors of consideration is diversification and risk management. By investing in a diversified company like Adani Enterprises, IHC can easily spread across various geographies. That way, it can reduce its exposure to market volatility and economic uncertainty. By investing in the Adani Group, IHC also acquired access to the Indian market. The investment is also a strategic partnership between the companies that can lead to mutual growth. Investing in the Adani group can also cause IHC to be exposed to a broader global business landscape.
IHC’s increased stake in Adani Enterprises also reflects its aim of achieving the energy goal towards sustainability and energy transition. This can also increase the reputation of IHC in the ESG-conscious world. For Adani Group also, the partnership is a highly profitable one. The various subsidiaries under Adani Enterprises can acquire access to the additional funds to open the doors for their upcoming projects. It also creates opportunities for other international partnerships that dropped earlier because of the Adani Crisis. This again enhances the global influence and reach of Gautam Adani.
The officials from the Adani Group have stated that they are overwhelmed by the decision of IHC to increase their stakes in the Adani Group. It helps the Adani Group restore faith in themselves after the Adani Crisis and reminds them of their good work growing India’s economy. Adani Group is also trying to expand further and strengthen its boundaries. The company has started numerous ventures in foreign locations, which validates the conglomerate’s standing as a global leader. The company strongly believes in increasing sustainable infrastructure and developing global aviation infrastructure in the country. It strives towards equitable energy transition.
Just a while ago, French Major Total Energy invested around 300 million USD in Adani Green Energy Ltd. Sovereign fund Qatar Investment Authority (QIA) invested 500 million USD for a 2.7% stake in the company. GQG Capital partners have also invested 900 million USD for a 6.4% stake. Many other foreign investors are also present in the list of the conglomerate’s investors. This signifies the success made by AGEL in the energy and utility sector. Also, looking at current market trends, it’s quite believable that the investment will be profitable.
IHC’s investment in the Adani Group can be regarded as one of the most successful ventures of recent times, benefiting both companies immensely. Considering how Adani Group is expanding its territories, more such investments will surely happen in the coming months, taking Adani Enterprises to the peak of success in no time at all.
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