Retail investors are steering clear of the Rs 20,000-crore Adani Enterprises’ share offer in the wake of a US hedge fund’s allegations of “brazen” corporate wrongdoing by the Adani Group.
But Abu Dhabi’s International Holding Company (IHC) has extended hope to group chairman Gautam Adani that the mega-issue may go through.
IHC says it will invest $400 million in the Follow-on Public Offer (FPO) by the Adani flagship company despite the massive troubles the group is facing.
After plunging in the previous two trading days, Adani Enterprises recovered some of its losses, climbing 5 per cent to close at Rs 2,892.85 on the NSE. That’s still far below Rs 3,112. the lower price band of India’s biggest-ever secondary share market issue.
Barely 3 per cent of the retail segment shares have been picked up and the issue is scheduled to close tomorrow.
Adani Enterprises was the lone Adani Group company to close in positive territory Monday. Other group companies continued to lose ground, some by as much as 20 per cent.
The group companies have lost $72 billion in a three-day trading bloodbath which has also badly eroded Gautam Adani’s personal fortune.
The Adani group issued a 413-page rebuttal late Monday to the US investment fund Hindenburg Research’s blistering report. It called the allegations baseless and an attack on India’s growth story. Hindenburg replied Tuesday saying the Adani Group had mainly failed to address the issues it raised.
“This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India," the Adani statement said.
Hindenburg responded equally strongly, saying: “We also believe that fraud is fraud, even when it’s perpetrated by one of the wealthiest individuals in the world.”
Adani Group CFO Jugeshinder Singh firmly insisted that the FPO will go through and that the group will not change the price band or extend the offer period. He pointed out that institutional investors are allowed to pick up shares offered to retail investors and added that Adani Enterprises acts as an incubator for the group’s key businesses. “It is an incubator. Its value comes from what it incubates,” he said in an interview, adding that this gave it strong value for institutional investors with a long-term view of the market.
Several Adani Group companies had a rough day on the stock exchange today. Adani Total Gas fell by 585 points (20 per cent) to Rs 2,342.40 on the NSE. The share has fallen from 3,740 last Wednesday to its current level.
Similarly, Adani Green Energy also fell 20 per cent today to Rs 1,189. The share was at Rs 1,872 last Wednesday just before the Hindenburg report was published. Adani Transmission also fell 18 per cent.
Other companies like Adani Power fell 5 per cent and the two newly acquired cement companies, ACC and Ambuja Cement rose.
