Abu Dhabi's IHC increases stake in India's Adani Enterprises to more than 5%

Move is a part of the company's strategy of continuing to 'explore unique investment opportunities in India'

IHC's said its move to raise its stake in Adani Enterprises reflects its confidence in the 'inherent strength' of sectors under the Indian conglomerate. AFP

Abu Dhabi's International Holding Company, the UAE's most valuable listed company, has increased its shareholding in Adani Enterprises, days after it sold off stakes in two other companies owned by the Indian conglomerate.

The additional stake, at over 5 per cent, is part of the company's strategy of continuing to “explore unique investment opportunities in India with the goal to maximise stakeholders’ return”, IHC said in a filing to the Abu Dhabi Securities Exchange, where its shares trade.

“This strategic increase reflects IHC's conviction in the world-leading incubation model of [Adani Enterprises] and we believe that the inherent strength of airports, data centres, green hydrogen and various other verticals being incubated under AEL and that AEL is poised to uniquely capitalise on India’s robust growth journey,” it said.

Ahmedabad-based Adani Enterprises – the flagship unit controlled by billionaire Gautam Adani – said IHC's move was “a ringing endorsement of our robust capex plans, governance and transparency”.

“This intergenerational relationship with IHC reflects well on India’s dynamic growth potential and offers substantial returns to our stakeholders,” a company representative said in a separate filing to the Bombay Stock Exchange.

Last week, IHC said it had entered into a definitive agreement to sell off its $2 billion foreign direct investment stake in two Adani Group companies, citing a rebalancing strategy of its overall portfolio.

IHC, through its Green Energy Investment Holding and Green Transmission Investment Holding units, said it reached a deal with an unnamed buyer to unload its investment in Adani Green Energy and Adani Transmission.

Adani Group is emerging from a firestorm triggered by a January report from Hindenburg Research, which accused the Indian conglomerate of stock manipulation and improper use of offshore tax havens, as well as raising concerns about its high level of debt.

Adani Group has vigorously denied all the allegations. Earlier this month, it said that its financial status remained unaffected and it has “rebounded strongly since the release of a short-selling report in January 2023”, without mentioning New York-based Hindenburg.

IHC, whose subsidiaries include Alpha Dhabi Holding, Q Holding, International Securities, Al Seer Marine and Multiply Group, has made several strategic investments in recent quarters to further expand its asset base.

It has investments in sectors including clean energy, food and agriculture, health care, property, information technology and artificial intelligence in 20 countries across Asia, Africa, Europe and the Americas.

Last month, IHC reported about a 62 per cent jump in second-quarter net profit to Dh4.56 billion ($1.24 billion), as revenue grew 13 per cent annually to about Dh13 billion.

At the time, it also said that its strategy is now inclined towards more domestic business acquisitions, leveraging the UAE's stable economic environment, investor-friendly government policies, strategic location, tax incentives and diverse property market.