Adani Enterprises Ltd’s FPO was oversubscribed by 1.02 times on its final day, due to high demand from non-institutional and qualified institutional investors. Retail investors, however, abstained from subscribing due to the large gap between the stock price and the FPO price range.
FPO refers to a follow-on public offering of shares from a publicly listed company, while IPO refers to a first public offering of shares from a privately held company.
As per data released by BSE, Adani received bids for 463,979,960 shares at 15:25 IST, compared to the 455,067,91 shares on offer. The NII portion was oversubscribed by 3.26 times, followed by QIBs with a 97% subscription rate, and employees at 52%. Only 11% of retail investors subscribed.
The public issue that opened for subscription on Friday, January 27, will close on Tuesday, January 31.
Adani Enterprises Ltd set the price range for its proposed offering at ₹3,112 to ₹3,276 per share. The company’s stock closed at ₹2947 on Tuesday, a 7% decline from the bottom of the price range and 11% below the upper limit.
Despite the stock’s trading below the fixed price range, the company confirmed in an interview with CNBC-TV18 that the FPO will proceed as planned without any changes to the price.
Day 1 of the public offering saw only a 1% subscription rate and Day 2 had a 3% subscription rate.
Adani Group stocks have suffered sharp losses due to allegations of fraud from Hindenburg Research. The investment firm had accused the Adani Group of accounting fraud and stock manipulation, triggering stock prices of its companies to hit lower circuits. The Group has, however, denied the allegations and accused Hindenburg Research of spreading malicious disinformation. The group also issued a 413-page statement to affirm its stance.
On Jan. 25, anchors accounted for 29.92% of the FPO by purchasing 1,82,68,925 shares out of 6,10,50,061 offered. 23 key anchor investors received most of the INR 5,984.90 crore anchor allocation. No shares were given to domestic mutual fund schemes, but insurance companies were major domestic institutional participants. The FPO offers 6,47,38,475 equity shares, with a minimum bid of 4 shares and subsequent bids in multiples of 4.
Adani offers retail investors a discount of ₹64 per FPO equity share. The company aims to raise ₹20,000 crore from the FPO, with the net proceeds going towards paying off debts and funding some subsidiaries’ capital expenditures.
Reports suggest the capital expenditures will be for green hydrogen ecosystem projects, airport improvements, and a greenfield expressway. The retail portion of the offer accounts for at least 35% of the net offer, the NII portion is at least 15%, and the QIB portion is up to 50%, according to Adani’s DRHP.
