A Rs 20,000-crore share sale by Adani Enterprises remains on schedule at the planned issue price and requires no addendum to be published on account of the report published by Hindenburg Research, the company said on Saturday.
Sources who spoke to Reuters said bankers were considering changes due to a market rout in the group’s shares. Bankers on the deal were considering extending the sale or cutting the issue price after shares of Adani plunged following the report, three people familiar with the matter told Reuters on Saturday.
“All our stakeholders including bankers and investors have full faith in the FPO (follow-on public offer). We are extremely confident about the success of the FPO,” the company said to Reuters.
Adani Enterprises on Saturday said investors looking to participate in the follow-on public offer can rely on the notice shared by it on Friday in addition to details shared in the RHP before making an investment in the FPO. “The information contained in the (Hindenburg Research) Report or on the related website is not incorporated by reference in the RHP and does not constitute a part of the RHP,” Adani Enterprises added.
Seven listed companies of the conglomerate controlled by Gautam Adani have lost a combined $48 billion in market value since Hindenburg Research on Tuesday flagged concerns about debt levels and their use of tax havens.
The Adani Group has called the report baseless and said it was considering taking action against Hindenburg.
Sources had said that among the options the bankers were considering included extending the Tuesday subscription closing date by four days. Friday’s 20% fall in shares of group flagship Adani Enterprises dragged it 11% below the minimum offer price of the secondary sale. On the first day of retail bidding on Friday, the issue attracted around 1% of its targeted number of subscribers, raising concerns over whether it would be able to proceed. Investors, mostly retail, had bid for around 470,160 of the 45.5 million shares on offer, stock exchange data showed. “Everyone was shocked. They did not expect such a poor response,” one source said.
The other option being considered by bankers is lowering the price, the sources said, with one saying it could be cut by as much as 10%. Adani had set a floor price of Rs 3,112 per share and a cap of Rs 3,276 — well above their close at Rs 2,761.45 on Friday. A decision was expected on Monday, the sources said.
“Revision in price band or time extension of public issue can technically be undertaken with a newspaper advertisement and issuing an addendum,” said Sumit Agrawal, managing partner at Regstreet Law Advisors, and a former officer of the Indian capital markets regulator.
The sale is being managed by Jefferies, SBI Capital Markets and ICICI Securities, among others. They did not immediately respond to requests for comment.
The Hindenburg report questioned how the Adani Group used entities in offshore tax havens such as Mauritius and the Caribbean islands. It said key listed Adani companies had “substantial debt”, which put the entire group on a “precarious financial footing”.