MUMBAI, Jan 31 (Reuters) – Indian billionaire Gautam Adani’s $2.5 billion share sale neared full subscription on Tuesday as investors pumped in funds for his conglomerate following a volatile week in which its The shares were buoyed by short-seller reports.
The secondary share sale of flagship Adani Enterprises (ADEL.NS) was subscribed 85% including anchor investor portion on Tuesday, Indian stock exchange data showed. At least 90% subscription is required for the share sale to go through.
As of Monday, the book building process of the country’s largest share sale had received only 3% of the bids.
Adani Group shares have tumbled after a January 24 report by US-based Hindenburg Research raised concerns about high debt levels and use of tax havens, with cumulative losses now at $65 billion. Adani has termed the report as baseless.
The share sale is important for Adani, not just because it is India’s biggest follow-up offering and will help cut debt, but also because its success will be seen by investors as a seal of confidence when the tycoon is facing one of its greatest challenges. Business and reputational challenges of recent times.
Amid growing concerns, the group has repeatedly said in recent days that investors are standing by it and that there will be no share offer. Reuters reported that at one point bankers considered changing the pricing of the issue or increasing sales.
Support for Adani’s share sale came even as the major’s shares were trading at Rs 3,002, up nearly 4% but below the lower end of the Rs 3,112 a share sale price band.
Founder Deepan Mehta said, “It looks down the wire with only a few hours left on the last day, but the offer should be full. It looks like institutions may subscribe to capitalize on the opportunity to buy in bulk outside the open market.” Have been.” Director of Elixir Equities.
Over the weekend and through Monday, Adani’s firm held extensive discussions with investment bankers and institutional investors to attract subscription, according to two sources with direct knowledge of the talks.
Demand from retail investors remained muted, with only about 9% of the shares on offer from that segment being bid for. The data showed that on Tuesday, there was demand from foreign institutional investors as well as corporates with bids above Rs 10 lakh.
Abu Dhabi Group International Holding Company (IHC.AD) said it will invest $400 million in the issue.
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said, “The follow-on public offering will have to go through to restore investor confidence.”
The Hindenburg Report and its fallout attracted global attention. Adani is now the eighth-richest person in the world, down from ranking third on Forbes’ rich list last week.
Global index publisher FTSE Russell on Tuesday said it continues to monitor publicly available information on the group, particularly from Indian regulatory authorities.
Hindenburg has said in its report that it has shorted Adani Group’s US-bonds and non-India traded derivatives. On Tuesday, US dollar-denominated bonds issued by Adani Ports and Special Economic Zones continued to decline for a second week.
Reporting by M. Sriram and Chris Thomas; Editing by Aditya Kalra and Muralikumar Anantharaman
Our Standards: The Thomson Reuters Trust Principles.
