Adani Enterprises FPO’s anchor book gets 1.5x bids

Elm Company

Adani Enterprises, the flagship company of Adani Group, raised 5,984.9 crore from 33 institutional investors, including Maybank Securities, Life Insurance Corp. of India, SBI Employees Pension Fund, SBI Life Insurance, HDFC Life Insurance, Abu Dhabi Investment Authority, Goldman Sachs Investment, and Morgan Stanley Asia. The investors bid for the anchor portion of Adani’s 20,000 crore follow-on public offering.

The anchor portion of the FPO, which will open for retail investors later this week, was oversubscribed around 1.5 times, according to people aware of the development. The subscription for the anchor book came on a day when short seller Hindenburg raised concerns over the Adani group’s debt position, resulting in steep losses in several Adani group stocks.

The FPO will be open for subscription from 27-31 January.

The FPO committee of the Adani Enterprises board, in consultation with the investment bankers, have finalized the allocation of 18.27 million shares to anchor investors at 3,276 apiece, the company told stock exchanges. Anchor investors have paid half of 5,984.9 crore raised, or 1,638 per share comprising around 2,992.45 crore, with the balance 1,638 per share to be paid at one or more calls by the company board.

Maybank Securities is the biggest investor, accounting for 34.09% of the anchor portion, with a total bid value of 2,040 crore. Other large investors included NBFC Winro Commercial (India), which was allocated shares worth 334.99 crore, ELM Park Fund ( 339 crore), LIC ( 299.99 crore), ADIA ( 153.42 crore), SBI EPF ( 99.99 crore), SBI Life ( 124.99 crore), BNP Paribas Arbitrage ( 250 crore), Societe Generale ( 100 crore), Goldman Sachs Investment ( 146 crore) and Morgan Stanley Asia (Singapore) 82 crore.

Shares of Adani Enterprises fell 1.54% to 3,389.85 on BSE Wednesday ahead of the allocation details to the anchor investors.

There will be a lock-in of 90 days on 50% of the FPO shares allotted to anchor investors from the date of allotment and an additional 30 days for the remaining 50% from the allotment date.

“The FPO aims to maximize retail and HNI categories as they are inter-generational investors unlike MFs or DIIs who have a much shorter time horizon for investments,” Jugishender ‘Robbie’ Singh, Adani Group chief financial officer, said in an interview.

Post the 20,000 crore FPO, retail investor holding in Adani Enterprises will increase from around 1.4% to around 3.6%, he added.

On steep valuations of his group companies becoming a likely roadblock for retail investors, Singh said, “High equity valuations imply that people value our growth, and this reduces our risk premium, which in turn will boost the value of our utility business.”

To draw retail investors, the company will give an added discount of 64 per partly paid-up share from the cut-off price. The price range of the FPO, running through 27-31 January, has been fixed between 3,112 and 3,276.

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