MUMBAI: The massive sell-off in Adani Group stocks continued for the third consecutive session on Monday, wiping out nearly Rs 1.4 lakh crore worth of investors’ wealth. In all, about 29% of the group’s market capitalisation, or about Rs 5.6 lakh crore, has been eroded in the last three trading sessions.
The steep slide in the conglomerate’s stocks — which started on Wednesday after US-based short seller Hindenburg Research released a report criticising the group — also pushed its chairman Gautam Adani to the eighth spot among the world’s richest, down from seventh on Friday and third a week earlier. With a net worth of $88.2 billion (about Rs 7.2 lakh crore), Asia’s richest person is just $4.1 billion (about Rs 33,000 crore) ahead of Reliance Industries chairman Mukesh Ambani, who’s at the 10th spot, according to Forbes’ real time billionaire index.
The sharp sell-off came despite the group on Sunday night releasing a 413-page document to answer 88 queries from Hindenburg Research.
Adani Ent FPO crawls: 3% in 2 days
The Rs 20,000-crore follow-on public offering (FPO) by Adani Enterprises (AEL) received just 3% subscription on the second day of the bidding. The development comes even as the Abu Dhabi-based conglomerate International Holding Company (IHC) agreed to invest $400 million (about Rs 3,200 crore) in the issue. IHC is an existing investor in AEL and the latest commitment will be its second deal in the flagship of the Adani Group.
By close of bidding on Monday, AEL garnered bids for nearly 14 lakh shares, representing 3% of the total 4.6 crore shares that’s on offer, data on the BSE website showed. The FPO, sold in the Rs 3,112-3,276 per share price range, is higher than AEL’s Monday closing price of Rs 2,879 on the BSE. The offer is set to close on Tuesday.
At close of bidding on the second day, the part reserved for retail investors was subscribed 4% of the allotted quota, employees’ portion 13%, while the HNI (non-institutional investors) portion was subscribed 4%. Qualified institutional buyers (QIBs) had bid for 4,576 shares of the 1.3 crore shares earmarked for them. Usually, institutions and HNIs bid on the last day of an offer. AEL expects three family offices from the UK, Qatar and Bahrain to invest a sizeable amount in the FPO on the last day.
On Monday, Abu Dhabi’s IHC said it will subscribe to 16% of AEL’s FPO. It will route the investment through its subsidiary Green Transmission Investment Holding RSC. Once the FPO concludes successfully, IHC’s stake in AEL will go up from the current 4%. In April 2022, it had announced an investment of Rs 7,700 crore in AEL as part of its broader capital infusion in Adani Group companies.
IHC has also invested Rs 3,850 crore each in Adani Transmission and Adani Green Energy. “The advantage of the FPO is the historical reference for the company’s earnings report, company’s management, business practices, and much data to bank on before making any investment decision,” said IHC CEO Syed Basar Shueb. He added, “We see a strong potential for growth from a long-term perspective.”
Since AEL is issuing partly paid-up shares, investors in the FPO will pay Rs 1,638 per share in the first tranche, at the upper end of the price band. They will pay the balance amount at a later date.
On day one of the offer (January 27), the FPO was subscribed 1%. The day before the FPO opened for bidding, AEL’s Rs 5,985-crore anchor book, a part of the QIB portion, was fully subscribed. Consequently, the shares reserved for bidding was reduced to 4.6 crore shares from the initial 6.5 crore shares.
