Adani Ent FPO: Adani Ent raises Rs 6K cr from anchor investors before FPO; MFs stay away

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Ahead of its follow-on public offer (FPO), has raised Rs 5,985 crore by allotting shares to anchor investors. The Adani Group’s flagship company has allotted 1,82,68,925 shares to over 30 institutional investors at Rs 3,276 a share, the upper end of the FPO price band of Rs 3,112-3,276 a share.

The anchor book received strong response from investors across classes. These include Abu Dhabi Investment Authority (ADIA), Maybank Asia, Goldman Sachs, Nomura Financial, Societe Generale, Jupiter, BNP Paribas, Al Mehwar, Citigroup, and Morgan Stanley.

Among domestic investors, only life insurance companies participated in the anchor placement. Mutual funds shied away from the issue.

LIC was allotted 9,15,748 shares or 5% of the total anchor portion. The life insurer is an existing shareholder of Adani Enterprises, holding 4.2% stake.

Nomura Singapore, which is also an existing shareholder, was allotted 1,95,364 shares or 1.07% of the total anchor portion. The Japanese investment bank held 1.08% stake as on December 31.

Besides LIC, SBI Life Insurance and HDFC Life Insurance participated in the pre-FPO placement.

ADIA was allotted 4,68,320 shares or 2.6% of the anchor book, while ELM Park Fund, a Texas-based asset management firm, was allotted 10,35,108 shares or 5.67% of the anchor book.The Rs 20,000-crore FPO of Adani Enterprises will open for subscription on Friday and close on Tuesday.

The company proposes to use the proceeds of the FPO to fund capital expenditure requirements and repay debt of some of the company’s subsidiaries, including Adani Airport, Adani Road Transport, and Mundra Solar.

Ahead of the FPO, negative news encircled the group, which knocked down stocks across the board. This happened after US-based Hindenburg Research claimed that the 7 key listed companies of the group are “85%+ overvalued even if you ignore our investigation and take the companies’ financials at face value.”

The research firm said it holds short positions in Adani Group companies through US-traded bonds and non-Indian-traded derivatives.

Shares of Adani Enterprises ended 1.5% down at Rs 3,388.95 on the National Stock Exchange. Adani Ports and Special Economic Zone dropped 6.3% to Rs 713.15.

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