NEW DELHI: The largest follow-on public offering (FPO) in India, worth Rs 20,000 crore by Adani Enterprises, was oversubscribed on the last day today with strong backing from non-institutional investors, despite a scathing report by New York’s short-seller Hindenburg tainting market sentiments.
Data from stock exchanges reveals that around 6 pm, bids were received for 5,08,68,352 fresh shares, or 112%, of the 4,55,06,791 fresh shares on offer under the FPO.
While the demand from retail investors has been low so far at just 12%, the non-institutional investor category was over-subscribed 3.32 times while that of qualified institutional buyers (QIB) was also oversubscribed 126%.
While the FPO was priced at Rs 3,112-3,276 per share, Adani Enterprises NSE 2.8%, the flagship business of billionaire Gautam Adani, saw its shares end the day 3.35% higher at Rs 2,975.
FPO applicants had to pay 50% up front and the remaining amount in subsequent instalments. The issuance offered a discount of Rs 64 per share to retail investors.
International Holding Co (IHC), a global corporation with headquarters in Abu Dhabi, was revealed to be investing $400 million in the FPO through its subsidiary Green Transmission Investment Holding RSC. The investment, 16% of the FPO, is the largest ever made in India.
Adani Group declined to either extend the dates or change the price band despite the low subscription numbers in the first two days and the share price dropping below the FPO price band.
Adani Enterprises’ stock price has decreased by over 29% from its 52-week high of Rs 4,190.
The two parties have been involved in a verbal battle ever since Hindenburg published a study that made various accusations against the Adani Group. Between those two points, Adani stock has dropped by about 25%.
The Adani Group questioned the purpose of the report and claimed it was an example of unethical short selling by a foreign entity by publishing a report to manipulate and depress the price of stock and create a false market in a 413-page thorough rebuttal to the 88 questions posed by the New York-based short-seller.
According to Adani, this is not just an unjustified attack on one particular company but also a deliberate attack on India, the independence, integrity, and excellence of Indian institutions, as well as the country’s progress and ambition.