Adani’s $2.5 billion stock offering is backed by investors, despite the short selling attack

MUMBAI (Reuters) – Indian billionaire Gautam Adani’s $2.5 billion sale came close to being fully subscribed on Tuesday as investors poured cash after a turbulent week for his group, in which its shares plunged due to the scathing short selling report.

Sell ​​secondary stock to Adani Enterprises (ADEL.NS) It was 93% subscribed on Tuesday, including the lead investor portion, Indian stock exchange data showed. The sale of shares needed at least 90% subscription for the process to take place.

By Monday, the record-breaking operation of the country’s largest share sale had received just 3% of bids, amid fears that the share sale could face difficulties due to the market crash in Adani shares in recent days.

The share sale is crucial for Adani, not only because it is the biggest follow-on bid in India and will help reduce debt, but also because its success will be seen as a stamp of confidence by investors at a time when the businessman is facing one of his biggest bids. Recent business and reputation challenges.

The show closes days after Adani’s public confrontation with Hindenburg Research, which on January 24 cited concerns about the use of tax havens and “significant debt” at the group. She added that shares in seven companies listed in “Adani” witnessed a decline of 85% due to what she called “high valuations.”

It has since caused cumulative losses of $65 billion for shares of the Adani Group, which called the report unfounded.

Support for the sale of Adani shares came even with the main shares trading at Rs 2,967, up almost 2.5% but below the minimum share sale price range of Rs 3,112.

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said Deepan Mehta, Elixir’s Founder and Equity Manager.

The total gross debt of the Adani Group in the fiscal year ending March 31, 2022 increased by 40% to 2.2 trillion rupees ($26.83 billion). Over the past decade, the group has been “constantly letting go,” Adani said on Sunday — while responding to Hindenburg’s allegations. Hindenburg later said that “Adani’s response largely confirmed our findings and ignored our main questions”.

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The group has said repeatedly in recent days that investors are on its side and the offering of shares will continue, amid growing fears it may not happen. Reuters reported that bankers at some point considered adjusting the issue prices or extending the sale.

Adani even said the Hindenburg report was a “calculated attack” on the state and its institutions while the CFO compared the market’s rout of its shares to a colonial-era massacre.

Demand from retail investors remained muted, taking bids worth only about 10% of the shares offered for the sector. The data showed that the demand on Tuesday came mostly from foreign institutional investors, as well as from companies bidding more than 1 million rupees each.

Over the weekend and into Monday, Adani’s company was in extensive discussions with investment bankers and institutional investors to attract subscriptions, according to two sources with direct knowledge of the conversations.

Abu Dhabi International Holding Company (IHC.AD) She said she would invest $400 million in the release.

“The next public offering must continue to restore investor confidence,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

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The Hindenburg Report and its aftermath drew worldwide attention. Adani is now the eighth richest person in the world, down from the number three spot on the Forbes rich list last week.

Bring me back the transmission (ADAI.NS) It rose 1.6% on Tuesday, after losing 38% since the Hindenburg report, while Adani Ports and the Special Economic Zone rose. (APSE.NS) jumped 3.2%.

Take me back to Total Gas (ADAG.NS) Weakened at the minimum price by 10%, while Adani Power (ADAN.NS) Willmar condemned me (ADAW.NS) They both fell by 5%.

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Global index publisher FTSE Russell said on Tuesday that it continues to monitor publicly available information on the group, particularly from Indian regulatory authorities.

Hindenburg said in its report that it downgraded US bonds and derivatives traded outside India for Adani Group. US dollar-denominated bonds issued by Adani Ports and Special Economic Zone, on Tuesday, continued their decline in the second week.

($1 = 82.0025 Indian Rupees)

(Report) by M. Sriram and Chris Thomas; Editing by Aditya Kalra and Muralikumar Anantharaman

Our standards: Thomson Reuters Trust Principles.

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