Adani Infra, a subsidiary of Gautam Adani’s flagship company, is set to acquire a 30.07% stake in PSP Projects for ₹6.85 billion ($81.2 million), as announced on Tuesday.
Following the acquisition, Adani Infra will initiate an open offer to purchase an additional stake in PSP Projects, as required under Indian regulations for shareholdings exceeding 25%.
This strategic move bolsters Adani Group’s position in the infrastructure sector, adding PSP Projects’ robust $800 million order book to its growing portfolio. Shares of PSP Projects closed 4.4% higher on Tuesday, having surged up to 14% earlier in the day following reports of the deal by CNBC-TV18.
Gautam Adani’s Adani Infra To Buy 30.07% Stake
Billionaire Gautam Adani’s Adani Infra will buy a 30.07 per cent stake in construction firm PSP Projects for Rs 685.36 crore as it looks to consolidate its construction capabilities.
Adani Infra, a unit of Adani group’s flagship firm Adani Enterprises, will buy the shares from Prahladbhai S Patel, who leads PSP Projects and is its top shareholder, the construction firm said in a stock exchange filing.
The ports-to-energy group will also make an open offer post the acquisition. The Adani Group has in recent months done a series of acquisitions to strengthen its footprint across multiple sectors.
PSP Projects On Adani’s Investment
PSP Projects in the filing said Prahaladbhai S Patel “entered into a share purchase agreement dated November 19, 2024 (SPA) with the Acquirer (Adani Infra) to record the terms and conditions on which the Seller has agreed to sell, and the Acquirer has agreed to acquire up to 1,19,19,353 equity shares of the company representing up to 30.07 per cent of the paid-up equity share capital of the company.”
Existing promoters hold a 60.14 per cent interest in PSP Projects. Prabhladbhai S Patel holds 47.76 per cent shares, of which he is selling 30.07 per cent.
After the sale, the existing promoters and Adani Infra will each hold a 30.07 per cent stake. The open offer for an additional 26 per cent stake that Adani Infra will have to make to minority shareholders of PSP will make the Adani group the single largest shareholder in the firm.
Once the open offer is complete, Adani Infra “will acquire joint control over the company along with the existing promoter group and will be classified as one of the promoters of the company,” PSP Projects said.
Upon completion of the transaction, the board of the company will be reconstituted to include the directors nominated by Adani Infra.
As per the SHA, the existing promoter group and Adani Infra will have the right to nominate two directors each on the company board so long as they hold at least 20 per cent each of the equity share capital of the company.
At a shareholding threshold between 10 per cent and 20 per cent, they shall have the right to nominate one director each.
“Affirmative vote of the existing promoter group and the acquirer (or their relevant directors / nominees, as the case may be) shall be required on certain identified reserved matters,” the firm said without giving out details.
Either side will not be permitted to dispose of any shares of the company for a five-year period from the close of the transaction.
“Any transfer of securities post such period shall be subject to the right of first refusal and tag-along right in favour of the other party,” it said.
PSP Projects, which has industrial, institutional, residential and luxury projects like the Surat Diamond Bourse, had an order book of Rs 6546 crore as of September 30.
Its shares closed 4.4 per cent higher at Rs 671.75 on the BSE on Tuesday. The deal values PSP Projects at Rs 575 per share, a 15 per cent discount to Tuesday’s closing price.
PSP Projects said its board in a meeting on Tuesday “approved the proposed execution of a shareholders agreement (SHA) between the acquirer (Adani Infra), the company (PSP) and the current promoters and promoter group of the company consisting of Prahaladbhai S. Patel, Pooja Patel, Sagar Prahaladbhai Patel, Shilpaben Prahaladbhai Patel, PSP Family Trust, PPP Family Trust and SSP Family Trust (existing promoter group), to govern inter-se the rights and obligations of acquirer and the existing promoter group with regard to the company.”
