Family offices of some Indian conglomerates are said to have participated in Adani Enterprises’ Rs 20,000-crore follow-on public offer on Tuesday. HNI (high net worth investor) portion of the FPO was subscribed 3.31 times, thus helping the FPO sail through, which didn’t look possible last week after US short seller firm Hindenburg Research’s scathing report againt Adani Group.
Quoting industry sources, PTI reported family offices of some of the top industrialists in the country made offers for the shares. Names of the investors could not be immediately verified. Adani Enterprises also did not reveal the list of investors.
“The individuals who have really bought and rescued this offer have been non-institutional players, mainly coming from the family offices of the super rich. It is pertinent to note that the institutional players have just about bought what they have been allotted. The concern for the institutional players is that if they have invested in this climate their own boards would have raised objections,” research analyst Hemindra Hazari told India Today.
“What is critical is how does the market take it forward from here. Will they continue to show some concern on the Adani counters? Will there be foreign debt crisis triggered by short selling of Adani’s US bonds, which will send a negative signal,” he added.
Sajjan Jindal and Sunil Mittal subscribed to the follow-on offering in a last-minute push. The investments were from their personal funds and do not involve listed businesses that they head like JSW Steel Ltd. and Bharti Airtel Ltd, Bloomberg reported adding Jindal may have invested about $30 million.
The Hindenburg report sparked a $70 billion cumulative loss for the stock of the Adani group in four trading sessions.
Adani Enterprises’ share price fell below the offer price on the opening day of the FPO last week after Hindenburg Research alleged that the group was ”engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades”.
Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements. It called the Hindenburg report baseless and has threatened to sue the tiny New York short seller.
While the portion of a follow-on share sale in Adani Enterprises Ltd reserved for anchor investors was fully subscribed last week, institutional and other non-retail investors helped the offer reach desired subscription levels hours before the sale closed, according to data available from BSE.
As many as 5.08 crore shares were sought against an offer of 4.55 crore, even though the offer price was higher than the rate at which the company stock was being traded on the stock exchange. Adani Enterprises sold shares in a price band of Rs 3,112-3,276. On Tuesday, its share price closed at Rs 2,975 on the BSE.
Non-institutional investors put in bids for over three times the 96.16 lakh shares reserved for them, while the 1.28 crore shares reserved for qualified institutional buyers (QIBs) were subscribed 1.2 times, according to BSE data.
There was, however, a muted response from retail investors and company employees.
Retail investors, for whom roughly half of the issue was reserved, bid for just 12 per cent of the 2.29 crore shares earmarked for them. Employees sought 55 per cent of the 1.6 lakh shares reserved for them.
Overall, against 6.14 crore shares on offer, anchor and other investors bid for 6.45 crore.
Last week, Adani Enterprises raised Rs 5,985 crore from anchor investors. The company allotted 1.82 crore equity shares to 33 funds at Rs 3,276 apiece, taking the transaction size to Rs 5,985 crore, according to a circular uploaded on the BSE website.
Foreign investors who picked up the shares included Abu Dhabi Investment Authority, BNP Paribas Arbitrage, Societe Generale, Goldman Sachs Investment (Mauritius) Ltd, Morgan Stanley Asia (Singapore) Pte, Nomura Singapore Ltd and Citigroup Global Markets Mauritius.
A slew of domestic institutional investors, including LIC, SBI Life Insurance Company, HDFC Life Insurance Company and State Bank Of India Employees Pension Fund, also participated in the anchor book.
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