The best is yet to come for India and Adani Enterprises, said Jugeshinder Singh, CFO, Adani Group said on Thursday while announcing the Adani flagship’s mega follow-on-public offer (FPO). What you have seen so far is very meagre, Singh said.
Singh said Adani Enterprises Rs 20,000 crore will open for subscription on January 27. FPO is a process by which an already listed company issues new shares to investors or existing shareholders. FPO is used by companies to diversify their equity base.
On asked why Adani Enterprises did not prefer rights issue, Singh said, “Firstly, FPO will bring new shareholder register. This will further increase the participation of the average shareholders of India. Secondly, we would like to encourage participation from the remotest part of India to be a part of the wealth creation and growth story of India.”
Individual investors including high-net-worth individuals (HNIs) together held a 2.22 per cent stake in Adani Enterprises for the quarter that ended September 30, 2022. In general, a rights issue is offered at a special price to its existing shareholders in proportion to their existing holdings.
The price band of the FPO offer has been fixed from Rs 3,112-Rs 3,276 per FPO equity share. Investors can bid for a minimum of four equity shares and in multiples of four shares thereafter. The upcoming FPO will close on January 31, 2023. The company has offered a discount of Rs 64 per equity share for retail individual bidders bidding in the retail portion of the offer.
“Capital planning is a nearly 8 years old story for us. We are already doing this since 2015-2016. Today, we are doing public investment,” Singh said adding they are massively cash positive at the group level.
Adani Enterprises has proposed to utilise Rs 10,869 crore of the net proceeds of the FPO towards funding capital expenditure requirements of some of its subsidiaries in relation to certain projects of the green hydrogen ecosystem, improvement works of certain existing airport facilities and construction of greenfield expressway.
Adani Enterprises also plans to utilise Rs 4,165 crore to repay in full or part, certain borrowings of the company and three of its subsidiaries, namely, Adani Airport Holding, Adani Road Transport and Mundra Solar. The rest will be utilised towards general corporate purposes.
The FPO equity shares offered through this red herring prospectus are proposed to be listed on the stock exchanges. At present, promoters held a 72.63 per cent stake in the company as of September 30, while public shareholders including mutual funds, Life Insurance Corporation, foreign portfolio investors and others held a 27.37 per cent stake in the company.
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