Adani Enterprises raises ₹6,000 cr from anchor investors ahead of FPO

Ahead of the ₹20,000 crore follow-on public offer (FPO), Adani Enterprises, the flagship company of Adani group, on Wednesday raised ₹5984.9 crore from 33 anchor investors, which includes foreign as well as domestic institutional investors. The billionaire Gautam Adani-led company allotted 1,82,68,925 shares to institutional investors at ₹3,276 a share, the upper end of the FPO price band of ₹3,112-₹3,276 a share.

The anchor placement saw participation from marquee foreign investors such as Abu Dhabi Investment Authority (ADIA), Maybank Asia, Goldman Sachs, Nomura Financial, Societe Generale, Jupiter, BNP Paribas, Al Mehwar, Citigroup, and Morgan Stanley. Among domestic players, LIC of India, HDFC Life Insurance Co, SBI Employees Pension Fund, and SBI Life Insurance Co participated in the bid.

The ₹20,000 crore offering by Adani Enterprises, the country’s largest ever FPO, will open for subscription on January 27 and closes on January 31. The FPO committee of the board of directors of the company has fixed the floor price for the issue at ₹3,112-3,276 per share. The board also approved a discount of ₹64 per FPO equity share for retail individual investors. 

As per the document filed with SEBI, the conglomerate plans to use nearly ₹10,869 crore out of the ₹20,000 crore for funding capital expenditure requirements of its subsidiaries in relation to certain projects of the green hydrogen ecosystem, improvement works of certain existing airport facilities, and construction of greenfield expressway. Besides, it intends to utilise ₹4,165 crore for repayment of certain borrowings of the firm and its three arms - Adani Airport Holdings Ltd, Adani Road Transport Ltd and Mundra Solar Ltd. 

As of September 2022, Adani Enterprises had a total debt of around ₹40,000 crore.

Ahead of the FPO, Adani group faces some serious allegations, which knocked down shares of all seven listed companies of the conglomerate. The U.S.-based short seller firm Hindenburg Research on Wednesday accused Gautam Adan-led firms of manipulating stocks and accounting fraud scheme over decades. In a report, titled 'Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History', the investment firm said that multiple firms under Adani were highly leveraged relative to industry averages, and that the situation was worsening. The agency said that it has taken a short position in the Adani group firms and that of 7 listed companies are 85% overvalued.

Responding to Hindenburg’s report, Adani group has refuted the claims terming them “malicious, mala fide and brazen”, whose intention is to damage the group’s upcoming follow-on public offer. "The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming follow-on public offering from Adani Enterprises, the biggest FPO ever in India," says Jugeshinder Singh, group CFO, Adani group.

He said the investor community has always reposed faith in the Adani Group on the basis of detailed analysis and reports prepared by financial experts and leading national and international credit rating agencies. "Our informed and knowledgeable investors are not influenced by one-sided, motivated and unsubstantiated reports with vested interests." 

Singh said the Adani Group holds a diverse portfolio of market-leading businesses managed by CEOs of the highest professional calibre and overseen by experts in various fields for several decades. "The group has always been in compliance with all laws, regardless of jurisdiction, and maintains the highest standards of corporate governance."

Meanwhile, shares of Adani Enterprises closed Wednesday’s trade at ₹3,389.85, down 1.54% on the BSE.