Druckenmiller Bets On Adani; Adani Energy’s $1-Bn QIP Subscribed 6x With Rs 50k cr Demand

Billionaire Stanley Druckenmiller’s family office-led investment firms have made their maiden bet on Adani group, seeking shares of the conglomerate’s power transmission unit in an institutional sale that was oversubscribed six-times and fetching demand of over Rs 50,000 crore against an issue size of USD 1 billion.

Duquesne Family Office and two other US-based long-only funds – Driehaus Capital Management and Jennison Associates – invested in the qualified institutional placement (QIP) of Adani Energy Solutions, sources with direct knowledge of the matter said.

The Rs 8,340 crore (USD 1 billion) issue saw over 120 investors seek shares in the firm that is into power transmission, distribution and smart metering business.

Sources said the issue marked the debut of highly prestigious long-only investors Duquesne Family Office, Driehaus Capital Management and Jennison Associates which are known for their strong performance.

These investors are known for investing only in companies with high governance and are known for staying invested for decades.

The QIP was the first public equity raise by the conglomerate since a damning Hindenburg report last year wiped away billions in shareholder value.

The demand generated made the Adani Energy Solution Ltd QIP the largest in the energy space.

Adani Energy Solutions’ stock gained over 15 per cent in intraday on Thursday before closing 11.24 per cent higher in Mumbai.

Duquesne is founded by billionaire Stanley Druckenmiller, who along with George Soros in 1992 broke the Bank of England by shorting the British pound, leading to its crash and earnings over a billion dollars.

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Adani Group has a history of introducing several long-only investors in the market. In the past years, it has brought large investors including GQG Partners, Qatar Investment Authority (QIA), and International Holding Company (IHC).

These existing investors of Adani group also participated in the QIP, sources said.

Other major global names that participated in the QIP include Blackrock, Jupiter Asset Management, Nomura Asset Management, and Eastspring.

Domestic mutual funds that have participated include SBI Mutual Fund, HDFC Mutual Fund, Axis Mutual Fund, Bandhan Mutual Fund, LIC, WhiteOak, 360One among others.

Insurance companies including SBI Insurance, SBI Pension and ASK Asset Management have also participated, according to the sources.

QIP is an instrument used by listed companies to raise funds from large institutions.

The fundraise is the first after Adani group’s flagship firm scrapped a Rs 20,000 crore issue in February last year, following the Hindenburg report alleging accounting fraud and stock manipulation.

Though the group vehemently and repeatedly denied all allegations, listed companies of the conglomerate at one point saw over USD 150 billion of their market value being wiped out.

While the group has largely recovered, a successful QIP is being seen as a powerful vote of investor confidence in the tycoon.

Separately, Adani Enterprises Ltd, the flagship firm of the group, is looking to revive its first-ever public sale of bonds. It plans to raise as much as Rs 600 crore.

The company has hired Trust Investment Advisors, AK Capital Services and Nuvama Wealth Management as lead managers for the issuances.

The group had tapped the dollar bond market in March this year – the first time since the Hindenburg report – when its solar energy unit Adani Green Energy Ltd and associated firms got bids of about USD 2.9 billion.