85% of Adani’s significant share sale is underwritten while institutions are injecting cash

MUMBAI (Reuters) – Indian billionaire Gautam Adani’s $2.5 billion sale came close to being fully subscribed on Tuesday as investors poured cash after a turbulent week for his group, in which its shares plunged due to the scathing short selling report.

Sell ​​secondary stock to Adani Enterprises (ADEL.NS) It was 85% subscribed on Tuesday, including the lead investor portion, Indian stock exchange data showed. The sale of shares needs at least 90% participation in order to take place.

By Monday, the record-building operation of the nation’s largest stock sale had received just 3% of bids.

Adani Group shares fell after the Jan. 24 report from US-based Hindenburg Research cited concerns about high debt levels and the use of tax havens, with accumulated losses now at $65 billion. Al-Adani described the report as unfounded.

The share sale is crucial for Adani, not only because it is the biggest follow-on bid in India and will help reduce debt, but also because its success will be seen as a stamp of confidence by investors at a time when the businessman is facing one of his biggest bids. Recent business and reputation challenges.

The group has said repeatedly in recent days that investors are on its side and the offering of shares will continue, amid growing fears it may not happen. Reuters reported that bankers at some point considered adjusting the issue prices or extending the sale.

Support for the sale of Adani shares came even with the main shares trading at Rs 3,002, up nearly 4% but below the lower end of the share selling price range of Rs 3,112.

said Deepan Mehta, Elixir’s Founder and Equity Manager.

Over the weekend and into Monday, Adani’s company was in extensive discussions with investment bankers and institutional investors to attract subscriptions, according to two sources with direct knowledge of the conversations.

Demand from retail investors remained muted, taking bids worth only about 9% of the shares offered for the sector. On Tuesday, the data showed that the demand came from foreign institutional investors, as well as companies that submitted offers of more than one million rupees each.

Abu Dhabi International Holding Company (IHC.AD) She said she would invest $400 million in the release.

“The next public offering must continue to restore investor confidence,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

The Hindenburg Report and its aftermath drew worldwide attention. Adani is now the eighth richest person in the world, down from the number three spot on the Forbes rich list last week.

Global index publisher FTSE Russell said on Tuesday that it continues to monitor publicly available information on the group, particularly from Indian regulatory authorities.

Hindenburg said in its report that it downgraded US bonds and derivatives traded outside India for Adani Group. US dollar-denominated bonds issued by Adani Ports and Special Economic Zone, on Tuesday, continued their decline in the second week.

(Report) by M. Sriram and Chris Thomas; Editing by Aditya Kalra and Muralikumar Anantharaman

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