In a boost to the Rs 20,000-crore follow-on offering of Adani Enterprises, Abu Dhabi’s International Holding Company (IHC) on Monday said it would invest $400 million in the FPO via its subsidiary Green Transmission Investment Holding RSC.
IHC was an investor in the offering’s anchor book as well.
“Our interest in Adani Group is driven by our confidence and belief in the fundamentals of Adani Enterprises; we see a strong potential for growth from a long-term perspective and added value to our shareholders,” said Syed Basar Shueb, chief executive officer, IHC.
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“The advantage of the FPO is the historical reference for the company’s earnings report, company’s management, business practices, and much data to bank on before making any investment decision,” he added.
This is the second investment deal IHC has completed with India’s Adani Group after last year’s $2-billion investment in three green-focused companies of the Adani Group, including Adani Green Energy, Adani Transmission, and Adani Enterprises.
A high QIB subscription may help the issue reach its target subscription requirement of 90%, said experts.
On Monday, the offering had garnered bids for 1.39 million shares for its Rs 20,000 crore follow-on offering against the offer size of 45.5 million shares, data from the BSE as of 5 pm showed. This means an effective subscription of 3% on the second day of the sale.
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The quota for both the non-institutional and retail investors was subscribed 0.04x times the shares on offer. The quote reserved for employees was subscribed 0.13 times, while the portion for qualified institutional buyers saw bids for 4,576 shares against 12.8 million shares on offer.
On Saturday, Adani Group CFO Jugeshinder Singh had clarified that there was no change in the offer price or schedule for the FPO. The issue closes on January 31.
Shares of Adani Enterprises ended 4.2% higher on Monday at Rs 2,878.5 apiece on the BSE. The price is still below the FPO floor price of Rs 3,112, which may impact participation, especially from high net worth and retail investors, according to experts.
The net proceeds of the FPO will be used for debt repayment and capital expenditure of AEL and its subsidiary companies. The tentative date for share allocation is February 3.
The anchor book for the FPO was oversubscribed on Wednesday, with the company finalising allocation of 18.26 million FPO equity shares to 33 investors, aggregating to about Rs 6,000 crore.
Foreign institutional investors included the likes of Abu Dhabi Investment Authority, Maybank Asia, Goldman Sachs, Nomura, Societe Generale, Jupiter, BNP Paribas, Al Mehwar, Citigroup and Morgan Stanley.
Domestic investors such as SBI Employee Pension Fund, HDFC Life, Life Insurance Corporation of India and SBI Life were also a part of the anchor book. No mutual fund participated.
The anchor shares were priced at the higher end of the price band at Rs 3,276 per share.