MUMBAI, Jan 28 (Portal) – A $2.5 billion share sale by Indian company Adani Enterprises (ADEL.NS) remains on track at the proposed issue price, the company told Portal on Saturday, while sources said , Bankers are considering changes in the group’s shares due to a market crisis.
Bankers are considering extending the sale or lowering the issue price after Adani’s shares plummeted after a report by a US short seller, three people familiar with the matter told Portal on Saturday.
Adani Group said in a statement: “There will be no change in the schedule or the issue price.”
“All of our stakeholders, including bankers and investors, have full confidence in the FPO (Follow on Public Offer). We are extremely confident in the success of the FPO,” it said.
Seven listed companies of the conglomerate controlled by one of the world’s richest men Gautam Adani have collectively lost $48 billion in market value since Hindenburg Research raised concerns about debt and use of tax havens on Tuesday.
The Adani Group has called the report baseless and said it is considering taking action against Hindenburg.
Sources had said that among the options the bankers were considering was a four-day extension of Tuesday’s closing date.
The 20% drop in shares of the group’s flagship company, Adani Enterprises, on Friday pushed them 11% below the secondary sale’s reserve offer price.
On Friday’s first day of retail bidding, the issuance attracted about 1% of its target number of subscribers, raising concerns about whether it could go ahead.
Investors, mostly private investors, had bid for around 470,160 of the 45.5 million shares on offer, stock market data showed.
“Everyone was shocked. They didn’t expect such a bad reaction,” a 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 ($38.22) per share and a cap of Rs.3,276 – well above Friday’s closing price of Rs.2,761.45.
A decision was expected on Monday, the sources said.
“A revision of the price range or a time extension of the public issue can technically be done with a newspaper advertisement and the issuance of a supplement,” said Sumit Agrawal, managing partner at Regstreet Law Advisors and a former official with the Indian capital markets regulator.
The sale will be managed by Jefferies, India’s 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 companies in offshore tax havens like Mauritius and the Caribbean islands.
It said key Adani publicly traded companies were in “substantial debt”, leaving the entire group in a “precarious financial footing”.
Reporting by Sriram Mani and Jayshree P Upadhyay; Adaptation by Aditya Kalra, William Mallard and Jason Neely
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