Adani Energy Solutions QIP use matched its offer document

In Q2FY27, Adani Energy Solutions Limited used Rs 2,657.59 crore of qualified institutional placement, or QIP, proceeds in line with its offer document, although CARE Ratings Limited observed that some payments passed through a current account rather than directly through the monitoring account. CARE relied on management and chartered accountant certificates to verify end use.

Why did CARE record a monitoring-account observation for AESL?

CARE recorded the observation because a few AESL payments during the quarter ended September 30, 2026 were routed through a current account rather than directly through the monitoring agency account, resulting in commingling of funds. The monitoring agency nevertheless said the Rs 2,657.59 crore used in Q2FY27 was in line with the offer document for the Rs 3,499.99 crore QIP raised on July 30, 2026.

The observation concerns the payment route, rather than a reported use outside the approved objects. CARE recorded nil deviation from the objects, no change in the means of finance and no event affecting the viability of the stated uses. The issuer's deviation statement for the September 30, 2026 quarter also reported no deviation or variation in the use of funds.

CARE said it relied on a management certificate and a chartered accountant certificate to verify the end use of payments not directly routed through the monitoring account. The certificate was issued by Dharmesh Parikh & Co LLP on October 31, 2026. CARE also considered bank statements, management disclosures and, for selected spending, sample invoices, while stating that it does not perform an audit or independently verify the certifications it receives.

How did AESL deploy its QIP proceeds in Q2FY27?

AESL used Rs 2,657.59 crore during Q2FY27 and had Rs 842.40 crore unutilised at September 30, 2026. As the report showed no utilisation at the beginning of the quarter, all reported deployment occurred during Q2FY27 after the July 2026 QIP.

Borrowing repayment or prepayment accounted for the largest deployment at Rs 1,272.07 crore, leaving Rs 27.93 crore from its Rs 1,300.00 crore allocation. Transmission-system capital expenditure followed at Rs 897.79 crore, with Rs 377.21 crore remaining. No QIP money was used for the proposed acquisition of 100% of Intellismart Infrastructure Private Limited, leaving its full Rs 50.00 crore allocation unutilised.

General corporate purposes, or GCP, used Rs 484.25 crore, compared with Rs 897.79 crore for transmission capex and Rs 3.48 crore for issue expenses. CARE listed capex, repayment, acquisition and GCP as ongoing with no delays at September 30, 2026. The disclosed completion periods were 18 months for capex and 12 months each for repayment, acquisition and GCP.

Which AESL payments were not directly routed through the monitoring account?

CARE specifically said that Rs 65.00 crore of AESL vendor payments within GCP spending was not routed directly through the monitoring account. The Rs 484.25 crore GCP total also comprised Rs 91.00 crore of fixed-deposit or overdraft payments, Rs 189.99 crore of letter-of-credit, or LC, payments, and Rs 138.26 crore of loans and advances to subsidiaries.

Of the Rs 138.26 crore advanced to under-construction subsidiaries, Rs 104.86 crore was used for vendor payments, according to the monitoring report. CARE said the loans and advances were in accordance with the offer document. That document permitted GCP use for purposes including working capital, repayment or prepayment of borrowings, business development, growth opportunities, investments or loans to subsidiaries, and company expenses.

For the Rs 189.99 crore of LC payments, CARE said it relied on management and chartered accountant certificates to verify the payments. The report also cites bank statements and sample invoices for the Rs 65.00 crore vendor-payment category. It does not state how much of the full Rs 2,657.59 crore Q2FY27 utilisation passed through the current account.

Where were AESL's remaining QIP proceeds held and what is next?

AESL held the Rs 842.40 crore unutilised balance in mutual funds, certificates of deposit, bank accounts and subsidiary balances at September 30, 2026. Its largest listed placement was Rs 247.00 crore in Aditya Birla Sun Life Ultra Short Term Fund, while TATA mutual funds, Nippon India Ultra Short Duration funds and Kotak Ultra Short Duration Fund each held Rs 150.00 crore.

The balance included Rs 97.83 crore in certificates of deposit, Rs 18.65 crore with AESL Projects Ltd, Rs 7.33 crore in an AESL-ICICI Bank account and Rs 3.57 crore in an AESL fixed-deposit or overdraft account. It also included Rs 1.54 crore with KPS III HVDC Transmission Ltd and Rs 0.50 crore with Mahan Transmission Ltd. The report deducted Rs 28.02 crore of interest earned on QIP-proceeds investments in arriving at the Rs 842.40 crore total.

CARE noted that a portion of QIP proceeds invested in mutual funds was redeemed into AESL's current account, after which part was transferred to a subsidiary. The amounts retained in the current account and transferred to the subsidiary remained unutilised. AESL also submitted a redemption request for Rs 44.00 crore of Kotak Liquid Funds on September 30, 2026, with the proceeds credited to the monitoring account on October 1, 2026.

Conclusion

The September 30, 2026 monitoring report shows that AESL deployed Rs 2,657.59 crore of its Rs 3,499.99 crore QIP without a reported deviation from approved objects. Repayment or prepayment of borrowings received Rs 1,272.07 crore, while CARE's separate observation was that some payments, including Rs 65.00 crore of vendor payments, did not directly pass through the monitoring account.

The next monitoring report should show the deployment of the remaining Rs 842.40 crore, particularly the Rs 377.21 crore earmarked for transmission-system capex, Rs 355.74 crore for GCP and Rs 50.00 crore for the Intellismart acquisition. The disclosed implementation periods remain 12 months for repayment, acquisition and GCP, and 18 months for capex, with no delays reported as of September 30, 2026.