Billionaire Gautam Adani agreed to buy a stake in PSP Projects Ltd. as his ports-to-power conglomerate seeks to reinforce engineering and construction capabilities for infrastructure projects.
Adani Infra (India) Ltd. will buy as much as 30.07% of the Ahmedabad-based construction firm from founder Prahaladbhai S. Patel for 6.85 billion rupees ($81.1 million), according to an exchange filing Tuesday. The Adani Group unit will pay 575 rupees a share for PSP Projects, a more than 14% discount to its closing price of 672 rupees on Tuesday.
This is the second acquisition by Adani Group in less than a month as the conglomerate bolsters its capabilities to build complex infrastructure projects. Last month, Adani had agreed to buy construction company ITD Cementation India Ltd. The group has been buying cement makers to support Indian Prime Minister Narendra Modi’s goal of modernizing the country’s creaky infrastructure.
Adani Infra also made an open offer to buy 26% more shares of PSP Projects from minority holders at 642.06 rupees apiece, according to a separate filing. That will amount to an additional investment of 6.6 billion rupees if the offer is fully subscribed.
However, Adani Infra will cap its holding in PSP Projects at 43.07%, which will be equal to the aggregate stake of all existing founders of the company. The final number and shares to be bought by Adani from founder Patel will be adjusted accordingly.
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Adani Group’s companies in India have plans to invest $100 billion over the next decade, it said in a statement. PSP Projects has a diversified construction portfolio, including factories and residential buildings, with an order book of 65.46 billion rupees. The company’s projects include a plant for Nestle in Gujarat and the Surat Diamond Bourse, according to its website.
After the completion of the deal and the open offer, Adani Infra will take joint control over PSP Projects with the existing founders, according to the filing. PSP’s board will be re-constituted to include directors nominated by the Adani unit. The existing founder group and Adani Infra cannot sell any shares in PSP for five years from the date of completion of the deal.
CNBC-TV18 first reported the transaction on Tuesday.
The Adani Group is back in expansionist and acquisition mode after recovering from an attack by short-seller Hindenburg Research in early 2023. Hindenburg’s accusations of fraud and “brazen” stock price manipulation wiped out more than $150 billion in the empire’s market value at one point. The group has repeatedly denied the charges.
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