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Journalism of Courage
CORPORATES AND foreign investors bailed out the Rs 20,000-crore follow-on public offering (FPO) of Adani Enterprises Ltd (AEL) Tuesday amid volatility in the stock market and the crash in Adani group shares following the release of the Hindenburg Research report that accused it of “brazen stock manipulation and accounting fraud”.
Despite the AEL share’s market price quoting below the issue price, the FPO was subscribed 1.12 times on the last day of the issue following a strong response from qualified institutional buyers (QIBs), including foreign institutional investors (FIIs) and non-institutional investors (NIIs) such as family offices of big industrialists that manage their personal wealth and ultra-high networth individuals.
The QIB portion was subscribed 1.26 times and NIIs 3.32 times. Corporates bid for 1.66 crore shares worth Rs 5,438 crore and FIIs applied for 1.24 crore shares worth Rs 4,127 crore.
However, the retail investors’ portion was subscribed only 0.12 times (12 per cent) with investors bidding for only 27.45 lakh shares as against the quota of 2.29 crore shares. The employees’ quota also remained undersubscribed with only 55 per cent of the quota getting bids. The undersubscribed portion of retail investors and employees will be allocated to QIBs and NIIs.
Overall, the FPO received bids for 5.08 crore shares as against the total offer of 4.55 crore shares.
The AEL stock gained 3.35 per cent to Rs 2,975, still below the FPO price of Rs 3,112-3,276 per share. Adani group companies had lost around Rs 5 lakh crore in market capitalisation since the Hindenburg report came out last week.
Abu Dhabi-based International Holding Company Monday said it will invest AED 1.4 billion, or close to Rs 3,300 crore, in the FPO through its subsidiary Green Transmission Investment Holding RSC Ltd. IHC has subscribed to 16 per cent of the FPO. This is the second investment deal IHC has completed with the Group after last year’s AED 7.3 billion investment in three green-focused companies, Adani Green Energy, Adani Transmission and Adani Enterprises.
Last week, in the anchor investor category, around 33 investors, including Maybank Securities Pte and Abu Dhabi Investment Authority, had put in bids worth Rs 5,984 crore for the follow-on public offer. About 1.82 crore shares of the company were allocated to these anchor investors at Rs 3,276 per equity share.
Meanwhile, Adani stocks showed a mixed trend Tuesday. Adani Port gained 2.67 per cent, Adani Transmission 3.73 per cent, Adani Total 3.35 per cent, Adani Green 3.06 per cent, ACC 3.39 per cent and Ambuja Cement 3.50 per cent. But Adani Power fell 5 per cent and Adani Wilmar lost 5 per cent. The benchmark Sensex gained 49 points, or 0.08 per cent, at 59,549.90, and NSE Nifty rose 13.20 points to 17,662.15. FIIs sold stocks worth Rs 5,439 crore Tuesday.
