Adani Enterprises’ Rs 20,000-cr FPO got subscribed only 1% on Day 1 owing mainly to a scathing report Hindenburg Research, the US short seller that triggered a selloff in the conglomerate’s listed firms, thus raising concerns over whether the FPO would be able to proceed.
Shares of Adani Enterprises plunged on Friday after a scathing report by the US short seller triggered a selloff in the conglomerate’s listed firms, casting doubts on the success of the company’s record Rs 20,000-crore secondary share sale.
Seven listed companies of the Adani conglomerate – controlled by one of the world’s richest men Gautam Adani – lost a combined $48 billion in market capitalisation, with US bonds of Adani firms also falling after Hindenburg Research flagged concerns in a Jan. 24 report about debt levels and the use of tax havens.
The rout led to a near 19% fall in shares of Adani Enterprises, the group’s flagship company, well below the offer price of its secondary sale.
Adani Enterprises Ltd (AEL) will sell shares in a price band of Rs 3,112 to Rs 3,276 apiece in the follow-on public offer (FPO), slated to open on January 27 and close on January 31, according to the offer letter.
Of the Rs 20,000 crore proceeds of the FPO, Rs 10,869 crore will be used for green hydrogen projects, work at the existing airports and construction of a greenfield expressway. Another Rs 4,165 crore will go towards repayment of debt taken by its airports, road and solar project subsidiaries.
On Friday, Adani Enterprises’ scrip on BSE closed trading 18.5% lower at Rs 2,762.
AEL is India’s largest listed business incubator and breeds businesses in four core industry sectors – energy and utility, transportation and logistics, consumer, and primary industry.
AEL operates and manages seven operational airports across the cities of Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram, and one greenfield airport in Navi Mumbai. It is also developing infrastructure projects, such as roads in India.