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Adani Infra, a subsidiary of the Adani Group, is seeking approval from the Competition Commission of India (CCI) to acquire a majority stake in PSP Projects Ltd. The transaction involves purchasing shares from the current promoters, including Prahaladbhai S. Patel, and a public open offer. The acquisition aims to consolidate Adani Infra's position in the construction sector, with PSP's order book valued at INR 6,546 crore as of September 2024. Adani Infra plans to increase its stake to 30.07 per cent and make an open offer for an additional 26 per cent, making it the largest shareholder.
Billionaire Gautam Adani's Adani Infra, a key subsidiary of Adani Enterprises, has approached the Competition Commission of India (CCI) for approval to acquire a majority stake in PSP Projects Ltd. Known for its diversified portfolio, PSP Projects is involved in major industrial, institutional, residential, and luxury developments, including high-profile projects such as the Surat Diamond Bourse. As of September 2024, the company boasts an impressive order book valued at INR 6,546 crore. Advertisement
The deal at hand involves Adani Infra acquiring a significant portion of equity shares in PSP Projects. These shares are to be purchased from Prahaladbhai S. Patel, one of the key promoters of PSP Projects, and through a public open offer targeting minority shareholders. The structure of the transaction is designed such that, following its completion, Adani Infra, the seller, and other existing promoters will each hold an equal share in the company.
A formal notice detailing the transaction has been filed with the CCI, outlining the regulatory framework under which the deal is being assessed. Specifically, the deal is being notified under Section 6(2) of the Competition Act, 2002, in conjunction with Section 5(a). Section 6(2) mandates that entities involved in a merger or acquisition of this scale must notify the CCI before proceeding, while Section 5(a) defines a combination as the acquisition of one or more enterprises or the merger of enterprises that exceed a certain financial threshold.
Adani Infra, in its submission to the CCI, maintains that the acquisition will not negatively impact competition in any relevant market or disrupt the market dynamics within India. The company has suggested that the CCI might examine a broad range of relevant markets based on the linked business activities of both Adani Infra and PSP Projects. These include real estate development, airport operations, cement manufacturing, and infrastructure services, all of which are interconnected sectors where both companies have operations.
This acquisition follows a previous announcement made earlier last year when Adani Infra disclosed plans to buy a 30.07 per cent stake in PSP Projects for INR 685.36 crore. This purchase is part of a broader strategy by Adani Infra to consolidate its presence in the construction and infrastructure sectors. PSP Projects' existing promoters hold a combined 60.14 per cent stake in the company. Of this, Prahaladbhai S. Patel holds a significant 47.76 per cent, from which he is selling 30.07 per cent to Adani Infra.
Once the transaction is completed, Adani Infra and the existing promoters will each hold a 30.07 per cent stake in PSP Projects, making them equal shareholders. Additionally, Adani Infra will be required to make an open offer to acquire an additional 26 per cent from PSP's minority shareholders. This offer will position Adani Infra as the single largest shareholder in the company, significantly enhancing its influence and control over PSP Projects.
In recent months, Adani Group has been actively expanding its footprint through a series of acquisitions across various sectors. This move to increase its stake in PSP Projects is aligned with the group's broader strategy to bolster its presence in the construction and infrastructure industries, sectors that are seeing substantial growth in India. The acquisition also enhances Adani Infra's ability to participate in large-scale projects, further cementing its position as a key player in India's development landscape.
The proposed acquisition of a majority stake in PSP Projects by Adani Infra represents a significant move to strengthen the Adani Group's position in the construction and infrastructure sectors. The transaction, currently under review by the Competition Commission of India, is expected to have minimal impact on market competition. Upon completion, Adani Infra will emerge as the largest shareholder in PSP Projects, further expanding its presence across multiple sectors such as real estate, airport operations, and infrastructure development.
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