MUMBAI: Amid speculation that Adani Enterprises may be forced to amend its follow-up public offering of Rs 20,000 crore following a plunge in its share price, the Ahmedabad-based company clarified that its FPO remains on track at the stipulated issue price.
The Adani Group flagship had set the FPO at Rs.3,112-3,276 per share. However, on Friday, the first day of retail bidding for the FPO, the stock closed at Rs 2,762 BSE. This led to speculation that the issue size or sale period might be changed.
Clarifying that “neither the timeline nor the issue price” of its follow-up bid of Rs. 20,000 has changed, the Adani Group said on Saturday: “All our stakeholders, including bankers and investors, have full confidence in the FPO. We are very confident of success.”
The clarification came even as index provider MSCI said on Saturday that it was monitoring the Adani Group’s situation and “factors that may affect the eligibility of its securities for inclusion in the MSCI Global Investable Market indices.” All Adani Group stocks except Adani Wilmar are included in the MSCI index.
Adani Enterprises shares fell 18% on Friday after a report by US-based researcher Hindenburg accused the Adani group of “brazen stock manipulation” and “accounting fraud” by a “vast maze of offshore stamp companies.” The group has dismissed the report as unfounded.
On Friday, the FPO attracted just 1% of its subscriber target, raising concerns about whether the issue is in jeopardy.
Kirtan Shah, founder of Credence Wealth Advisors, tweeted: “FPO most likely will not fail as there are underwriters on the issue and they have to buy it out. Besides, Adani can also lower the price of the FPO if needed. ” The FPO closes on January 31.
InGovern founder Shriram Subramanian said: “The rules allow a company to change the FPO price or extend the sale period. It also allows the company to withdraw the FPO if the issue falls short of the target subscription level.”
On 25th January the anchor book valued at Rs 5,985 crore, part of the QIB share, was fully subscribed. The anchor investors had subscribed to the issue at Rs 3,276 per share, the upper end of the price range.
In its FPO document, Adani Enterprises said, “Qualifying institutional buyers (QIBs) and non-institutional investors may not withdraw or lower their bid size/amount at any time, but retail investors and employees may adjust their bids during the FPO period or amend their bids until withdraw at the closing date of the issue.”
