MUMBAI, Jan 31 (Reuters) – Gautam Adani’s pivotal $2.5 billion stake sale has pushed investors to buy his flagship despite scathing short-selling reports that have beaten shares of the Indian billionaire. Adani Enterprises, which has been funded by the company, achieved a full offer on Tuesday.
The stock sale is important to Adani. Not only because it helps reduce his group’s debt, but its success is seen as a sign of investor confidence as he faces one of his biggest business and reputational challenges. because it will
A 30% anchor portion of the issuance was fully subscribed last week, but the bookbuilding process for India’s largest secondary stock sale hit a tender on Monday amid fears it could struggle due to a crash in Adani stocks. was only 3%.
But on Tuesday, the entire stock sale was fully booked as foreign institutional investors and companies put in the money, although participation by individual investors and Adani Enterprises (ADEL.NS) employees was low. .
“Investors will see the successful completion of the FPO (Follow-on Public Offering) as a welcome relief,” said Leonard Law, Senior Credit Analyst at Lucour Analytics Singapore. .Tuesday.
“The FPO will help expand the public offering of Adani Enterprises (thereby partially addressing the problem of promoters’ concentrated shareholdings), reduce the company’s leverage and improve investor sentiment. It helps,” added Law.
The proposal closed days after Adani’s public confrontation with Hindenburg Research. Hindenburg Research last week expressed concern about the use of tax havens and the group’s “high debt”. Shares of seven of Adani’s listed companies are down 85% at what the firm calls “extremely high valuations,” he added.
This brought the cumulative loss on Adani Group’s shares to $65 billion, which it said the report was baseless.
Support for Adani’s stake sale climbed nearly 3% despite flagship shares closing at Rs 2,973.9, but below the lower end of the selling price range at Rs 3,112.
For the financial year ended 31 March 2022, Adani Group’s total gross debt increased by 40% to Rs 2.2 trillion ($26.83 billion). Adani said Sunday in response to claims Hindenburg had “consistently de-levered” over the past decade.
Adani said the Hindenburg report was a “calculated attack” on India and its institutions, with the CFO comparing the stock market crash to a colonial-era massacre.
Hindenburg later said Adani’s “response largely confirmed our findings and ignored key questions.”
Adani has repeatedly said in recent days that investors are backing the company and that the public offering will go through. Bankers had at one point considered fine-tuning the issue price or extending the sale, according to Reuters.
Demand from retail investors only won bids representing approximately 10% of the segment’s offerings. Demand was mainly from foreign institutional investors and companies with bids above his Rs 1 million each, according to data.
Over the weekend and into Monday, Adani’s firm held extensive discussions with investment bankers and institutional investors to win subscriptions.
Abu Dhabi-based conglomerate International Holding Company (IHC.AD) said it would invest $400 million in the issuance.
The Hindenburg Report and its impact have captured the world’s attention. Adani is now the eighth richest person in the world, down from his third place on last week’s Forbes rich list.
Adani Transmissions (ADAI.NS) closed nearly 4% higher on Tuesday after falling 38% since the Hindenburg report. Meanwhile, Adaniport and Special Economic Zone (APSE.NS) rose 2.6% on him.
Adani Total Gas (ADAG.NS) fell 10% in the lower bound, while Adani Power (ADAN.NS) and Adani Wilmer (ADAW.NS) each fell 5%.
Global index publisher FTSE Russell said Tuesday it continues to monitor public information about the group, particularly from Indian regulators.
Hindenburg said in a report that it had shorted Adani Group’s US Treasuries and derivatives traded outside India. On Tuesday, US dollar-denominated bonds issued by Adani Ports and Special Economic Zone continued their decline for the second week in a row.
Reported by M. Sriram, Chris Thomas, Aditya Kalra, Jayshree Upadhyay, Anshuman Daga, Bengaluru Newsroom. Edited by Muralikumar Anantharaman and Alexander Smith
Our standards: Thomson Reuters Trust Principles.