Adani FPO
Hindenburg Research’s report impact: Adani Enterprises FPO receives muted response on day 1
Mumbai/IBNS: Adani Enterprises Ltd's follow-on public offer (FPO) received a bleak response across investor categories as the total issue was subscribed just 1% on Friday, data on the BSE website showed.
This comes after the massive sell-off in stocks triggered by US-based Hindenburg Research’s report.
According to an Economic Times report, the company received total bids of 4,70,160 shares against the issue size of 4,55,06,791 shares.
The stocks reserved for retail investors got bids for 3,99,880 shares against 2,29,08,464 shares on offer.
High net worth individuals (HNIs) bid for 60,456 shares against the portion of 96,16,323 shares set aside for them.
The ET report said the FPO received the weakest response from qualified institutional investors with just 2,656 shares subscribed in the category against 1,28,21,336 shares on offer.
Ahead of the FPO, Adani Enterprises raised Rs 5,985 crore by allotting shares to anchor investors ahead of the follow-on public offer (FPO).
Abu Dhabi Investment Authority (ADIA), Maybank Asia, Goldman Sachs, Nomura Financial, Societe Generale, Jupiter, BNP Paribas, Al Mehwar, Citigroup, and Morgan Stanley have been allotted the stocks.
Among domestic investors, only life insurance companies participated in the anchor placement. Mutual funds did not show interest in the issue.
LIC, which already holds a 4.2 percent stake, was allotted 9,15,748 shares or 5% of the total anchor portion.
The anchor book for Adani Enterprises Ltd. was oversubscribed by 1.8-2 times, Bloomberg had reported.
The price band for the FPO is Rs 3,112-3,276 a share but the sell-off in the stock in the open market pushed the price way below the price band, ET reported.
As a result, the stock plummeted 18.3% on the NSE at Rs 2,768.50, about 10% below the floor price of the FPO.
Intraday, the stock hit a 5-month low of Rs 2,712, set off by the negative report of American short-seller Hindenburg Research, the ET report said.
Adani Group slammed the report, alleging that it was timed with a mala fide intention to damage Adani Enterprises FPO.
It also threatened legal action against Hindenburg Research for a "malafide and mischievous" report.
“We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research,” Adani Group said in a statement on Thursday.
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