TNI Bureau: The Follow-On Public Offering (FPO) of Adani Enterprises, the parent company of the Adani Group, was fully subscribed on Wednesday, allowing billionaire Gautam Adani to finally relax.
The latest comes at a time when shares of Adani Group companies have been severely devalued on the stock market as a result of a report published by US short seller Hindenburg Research.
The highest amount, Rs 20,000 crore Against an offer size of 45.5 million shares, Adani Enterprises FPO received bids for 50.86 million shares. This indicates a total subscription on the third and final day of bidding of 112%. The earlier fully subscribed anchor portion is not included in this.
As the flagship company of the Adani Group saw its share price fall below the FPO price band of Rs 3,112-3,276 retail investors have stayed away from the FPO. Only 12% of the shares designated for retail investors have received bids.
Qualified institutional buyers, also known as QIBs, were in the lead, competing for 16.1 million of the 12.8 million shares reserved for them, representing a subscription of 1.26 times.
International Holding Co (IHC), a diversified conglomerate with headquarters in Abu Dhabi, was revealed to be investing $400 million in the FPO through its subsidiary Green Transmission Investment Holding RSC. The investment, 16% of the FPO, is the largest ever made in India.
Adani raised Rs 5,985 crore prior to the FPO’s launch by allocating 1,82,68,925 shares to over 30 institutional investors, including the Abu Dhabi Investment Authority (ADIA), Maybank Asia, Goldman Sachs, Nomura Financial, Societe Generale, Jupiter, BNP Paribas, Al Mehwar, Citigroup, and Morgan Stanley.
Despite the report published by US short seller firm Hindenburg Research, the Adani Enterprises FPO that opened for subscription on January 27 has been successful. The report caused a bloodbath on the stock market and destroyed a sizable portion of Adani Group companies’ market capitalization, including Adani Enterprises.
The valuations of some Adani Group companies are still being hurt by the Hindenburg report, but Adani Enterprises stock has been rising over the past two trading sessions.
Although the report had an effect on retail investors, anchor investors and institutional investors were unaffected. It should be noted that before the FPO opened for subscription, anchor investors purchased shares totaling almost Rs 6,000 crore. Additionally, IHC, one of the anchor investors, contributed $400 million to the share sale.