EXCLUSIVE: India’s Adani says $2.5bn share sale is on track, even as bankers weigh changes

EXCLUSIVE: India's Adani says $2.5bn share sale is on track, even as bankers weigh changes
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MUMBAI, January 28 (Reuters) – India’s Adani Enterprises sells shares for $2.5 billion. (ADEL.NS) remains on schedule at the planned issue price, the company told Reuters on Saturday, while sources said bankers were considering changes due to a slump in the market for the group’s shares.

Bankers on the deal were considering either extending the sale or lowering the issue price after Adani’s shares plunged following a report from a US short seller, three people familiar with the matter told Reuters on Saturday.

Adani Group in a statement said: “There are no changes to either the schedule or the issue price.”

“All of our stakeholders, including bankers and investors, have full faith in the FPO (follow-up public offer). We are very confident in the success of the FPO,” he said.

Seven listed companies from the conglomerate controlled by one of the world’s richest men, Gautam Adani, have lost a combined total of $48 billion in market value from Hindenburg Research on Tuesday marked concerns on debt levels and their use of tax havens.

The Adani Group called the report unfounded and said it was considering taking action against Hindenburg.

Sources had said options bankers were considering included extending the subscription’s closing date of Tuesday by four days.

Friday’s 20% drop in shares of the group’s flagship Adani Enterprises dragged them 11% below the minimum offer price of the secondary sale.

On the first day of retail bidding on Friday, the issue attracted about 1% of its target number of subscribers, raising concerns about whether it could continue.

Investors, mostly retailers, had bid for about 470,160 of the 45.5 million shares on offer, stock market data showed.

“Everyone was shocked. They didn’t expect such a bad response,” a source said.

The other option bankers are considering is to lower the price, the sources said, with one saying it could be cut by as much as 10%.

Adani had set a minimum price of 3,112 rupees ($38.22) per share and a ceiling of 3,276 rupees, well above Friday’s close of 2,761.45 rupees.

A decision was expected on Monday, the sources said.

“Technically, the review in the price band or the extension of the time of the public issuance can be followed up with a newspaper announcement and the issuance of an addendum,” said Sumit Agrawal, managing partner at Regstreet Law Advisors and a former regulator official. of Indian capital markets.

The sale is being managed by Jefferies, India’s SBI Capital Markets and ICICI Securities, among others. They did not immediately respond to requests for comment.

The Hindenburg report questioned how the Adani Group used entities in offshore tax havens such as Mauritius and the Caribbean islands.

He said Adani’s key publicly traded companies had “substantial debt”, putting the entire group on “precarious financial footing”.

Reporting by Sriram Mani and Jayshree P Upadhyay; edited by Aditya Kalra, William Mallard and Jason Neely

Our standards: The Thomson Reuters Trust Principles.

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