Adani Enterprises’ Rs 20,000-crore follow-on public offer (FPO) gathered momentum on the final day of bidding and got fully subscribed today. The issue, which was subscribed 1.12 times, received bids for 5,08,68,352 shares against the total offer size of 4,55,06,791 shares on Day 3. The quota reserved for qualified institutional bidders (QIBs) was booked 1.26 times while those of non-institutional investors got 3.32 times subscription. The employee quota attracted 55 per cent bids while the quota reserved for retail investors received 12 per cent bids.
It could be sensed that Adani Enterprises was betting big on institutions and strategic investors. Retail bids were expected to remain low as the stock price slipped below the FPO price band of Rs 3,112-3,276 per share.
Amid a slew of allegations and counter-allegations over the Hindenburg report that alleged fraud and stock manipulation at the Adani Group, stocks have seen a sharp erosion in values. That said, Adani Enterprises shares rebounded for two consecutive sessions.
The scrip rose 3.35 per cent to close at Rs 2,975. Adani Enterprises gained 6.76 per cent to hit an intraday high of Rs 3,072.95 after Abu Dhabi-based IHC announced its investment plan in the FPO. It settled 4.21 per cent higher in the previous session.
On Monday, Abu Dhabi’s IHC said it would invest $400 million (around Rs 3,200 crore) in the Adani Enterprises’ FPO through its subsidiary Green Transmission Investment Holding. IHC said it would subscribe to 16 per cent of Adani Enterprises’ $2.5 billion FPO.
Adani Group CFO Jugeshinder Singh told Business Today TV that long-term institutional and strategic investors don’t see any change in the value of Adani Enterprises after the recent drop in stock value, even as retail investors usually remain sensitive to share prices.
An issue is deemed successful if it receives at least 90 per cent subscription. Analysts said an institutional demand can give the Adani Group breathing room for adjusting oversubscription against the under subscriptions in retail and non-institutional investor categories.
Adani Enterprises’ FPO committee is scheduled to meet on February 1 for the offer price approval and prospectus.
Adani Enterprises, in a filing to BSE, said in case the offer price stays lower than anchor investor’s allocation price, the difference won’t be funded.
“The Adani crisis which had impacted market sentiments will be pushed to the back burner if the FPO sails through via institutional investment,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Meanwhile, Indian equity benchmarks finished slightly higher today as gains in automobile, state-owned lenders and consumer stocks countered losses in technology, pharma and energy shares.
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