Adani Enterprises FPO sails through with muted response from retail investors, employees
Adani Enterprises FPO managed to sail through after a lacklustre start to its Rs 20,000 crore ($2.5 billion) follow-on public offer, with only a 1% subscription on the first day of the share sale.
Adani Group FPO: According to stock exchange data, the Rs 20,000 crore share sale of Adani group's flagship firm- Adani Enterprises, was fully subscribed on Tuesday after non-retail investors bid in big volumes. As many as 4.62 crore shares were sought as against an offer of 4.55 crore.
Non-institutional investors play key role
Non-institutional investors put in bids for over three times the 96.16 lakh shares reserved for them, while the 1.28 crore shares reserved for qualified institutional buyers (QIBs) was almost fully subscribed, according to BSE data.
Muted response from retail investors
There was, however, muted response from retail investors and company employees. Retail investors, for whom roughly half of the issue was reserved, bid for just 11 per cent of the 2.29 crore shares earmarked for them.Employees sought 52 per cent of the 1.6 lakh shares reserved for them.
Earlier, Adani Enterprises, the flagship company of the Adani Group, had a lacklustre 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.
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.
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.
(With PTI input)