A number of Mauritius-based funds, which are currently classified as the company’s public shareholders, may participate in the Rs 20,000-crore follow-on offering (FPO) of Adani Enterprises, according to the buzz on the Street.
The Adani companies have a number of Mauritius-based funds which have invested or continue to invest in them. These include Albula Investment Fund, APMS Investment Fund, Elara India Opportunities Fund, LTS Investment Fund and Vespera Fund. All of these funds, except LTS Investment, have reduced the number of shares held in the company in the past year, data from primeinfobase show.
Albula Investment Fund publicly held investments to the tune of Rs 1,139 crore in eight non-Adani stocks, according to data from Trendlyne for the quarter ended December. APMS Investment Fund publicly held shares in eight stocks with a net worth of over Rs 18,854 crore, more than 98% of which was in Adani Total Gas, Adani Transmission and Adani Power.
Elara India Opportunities Fund publicly held 19 stocks with a net worth of over Rs 24,655 crore, the bulk of which was in Adani Enterprises, Adani Total Gas and Adani Transmission. LTS Investment Fund publicly held 11 stocks with a net worth of over Rs 11,898 crore, mostly in Adani Enterprises and Adani Transmission.
The FPO has been marketed in the US, the UK, the West Asia and Singapore and has garnered significant interest from foreign institutional investors, according to people in the know.
“I expect that the FPO may see foreign portfolio investors buy, but they might be the same FPIs who sold when the stock went up,” said analyst Travis Lundy of Quiddity Advisors in a recent note.
He refers to these Mauritius-based funds as ‘Very Adani Funds’. “These Very Adani Funds have probably sold to other holders, and may have short positions in futures too. In that case, those Very Adani Funds might be willing to buy part of an FPO if the price dropped dramatically,” he said.
The stock was quoting at Rs 3,700 levels in September, and ended at Rs 3,441 apiece on Tuesday, implying a drop of around 7% since then.
An email sent to Adani Enterprises did not get a response.
“You never know how this will play out. The FPO is open to both shareholders and non-shareholders of the company. Those owning shares in the company can also apply. Since these Mauritius funds are part of the public category of shareholders, there is no legal prohibition on them buying shares in the FPO,” said a legal expert.
To be sure, the actual bidding by investors for the shares will only commence on Wednesday for the anchor book, post which the bid will open for remaining investors on January 27. The closing date of the offer is January 31.
The floor price for the FPO is fixed at a minimum of Rs 3,112 per FPO equity share and the cap price is Rs 3,276 per FPO equity share for all categories of investors. The company has announced a discount of Rs 64 per FPO equity share for retail investors.
Adani’s Rs 20,000 crore FPO will be the country’s largest and may happen in two or three tranches. The initial tranche would be of Rs 10,000 crore.
ICICI Securities, Jefferies and SBI Capital were the bankers initially appointed for the FPO. Axis Capital, Elara Capital, BoB Capital Markets, IDBI Capital, JM Financial, Monarch Networth Capital and IIFL Securities were on-boarded later.