Adani Enterprises’ FPO gets slow start despite anchor investments

Adani Enterprises, the flagship company of the Adani Group, has had a lackluster start to its Rs 20,000 crore ($2.5 billion) follow-on public offer (FPO), with only a 1% subscription on the first day of the share sale. The offer, which runs until January 31, 2023, is priced between Rs 3,112 and Rs 3,276.

Retail investors bid for close to 4 lakh shares out of the 2.29 crore reserved. In comparison, qualified institutional buyers (QIBs) sought only 2,656 shares of the 1.28 crore reserved for them. Non-institutional investors sought 60,456 shares of the 96.16 lakh shares offered. Despite this, the Adani Group CFO Jugeshinder Singh remains confident that the Rs 20,000 crore issue will be successful.

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The FPO received a boost ahead of the share sale, with Adani Enterprises raising Rs 5,985 crore from anchor investors. The company allotted 1.82 crore equity shares to 33 funds at Rs 3,276 each, with foreign investors, including Abu Dhabi Investment Authority, BNP Paribas Arbitrage, and Goldman Sachs, among others, participating in the anchor book.

Several domestic institutional investors, including LIC and SBI Life Insurance Company, participated. Out of the proceeds from the offer, Rs 10,869 crore will be used for green hydrogen projects, work at existing airports, and the construction of a greenfield expressway.

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Adani Enterprises in a filing to the Bombay Stock Exchange said that in the event of the offer price being lower than the anchor investor allocation price, the difference will not be funded to anchor investors. The FPO committee is scheduled to meet on February 1 to approve the offer price and prospectus.

FAQ

Q1. What is the Adani Enterprises Follow-on Public Offer (FPO)?

A: Adani Enterprises Follow-on Public Offer (FPO) is a public share sale of Adani Group’s flagship company Adani Enterprises Ltd.

 

Q2. How has the response been for the Adani Enterprises FPO so far?

A: The response for the Adani Enterprises FPO has been tepid, with only 1% of the shares being subscribed on the first day of the share sale.

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