However, the retail investors have bid only 11 per cent of the shares set aside for them as the stock price slid below the FPO price band.
New Delhi: The Rs 20,000 crore follow-on public offer (FPO) of Adani Enterprises received bids for 46.27 million shares against an offer size of 45.5 million shares, representing a 102 per cent subscription on 31 January 2023, the third and final day of bidding.
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New Delhi: The Rs 20,000 crore follow-on public offer (FPO) of Adani Enterprises received bids for 46.27 million shares against an offer size of 45.5 million shares, representing a 102 per cent subscription on 31 January 2023, the third and final day of bidding.
Qualified institutional buyers (QIB) lead the bidding cycle with 12.44 million subscriptions of the 12.8 million shares set aside for them. This indicates a 97 per cent subscription. The non-institutional investors (NIIs) have oversubscribed to 326 per cent of the portion set aside for them. They have bid for 31.31 million shares against 9.6 million reserved. Meanwhile, employees have bid for 52 per cent of the shares reserved for them.
On Monday, the second day of book building process of the country’s largest share sale, Adani Enterprises FPO received only 3 per cent in bids, amid concerns that the share sale could struggle due to a market rout in Adani’s stocks in recent days.
The success of this FPO is critical for Adani Group for two broad reasons — hep cut debt, and more importantly, its success will be seen as a stamp of confidence by investors at a time the tycoon faces one of his biggest business and reputational challenges of recent times.
On 24 January 2023, US short seller Hindenburg Research released its report flagging concerns about the tax havens and “substantial debt” of the Adani Group. It added that shares in seven Adani listed companies have an 85% downside due to what it called “sky-high valuations”.
The Adani Group, which called the Hindenburg report ‘baseless’ has since then suffered nearly $65 billion in cumulative losses for stocks,
The support for Adani’s share sale came even as the flagship’s shares were trading at Rs 2,967, up nearly 2.5 per cent but below the lower end of the share sale price band of 3,112 rupees.
“It looks down to the wire with just a few hours remaining on the last day, but the offering should go through. Institutions seem to be subscribing to capitalise on opportunity to buy in bulk quantities outside the open market,” Dipan Mehta, founder director of Elixir Equities, told Reuters.
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Adani Group’s total gross debt in the financial year ended March 31, 2022, rose 40 per cent to 2.2 trillion rupees ($26.83 billion). Adani said on Sunday – while responding to Hindenburg’s allegations – that over the past decade the group has “consistently de-levered”. Hindenburg later said Adani’s “response largely confirmed our findings and ignored our key questions.”
