Controversy-racked Adani Enterprises has pulled off its $2.4-billion share issue, helped by big-name investors that included Abu Dhabi’s International Holding Co that stepped in and ensured the offer closed successfully.
But retail investors held on to their cash and only picked up 11 per cent of their allocation in the offer by Adani Group flagship Adani Enterprises.
Initially, the group was hoping for a wider take-up by retail investors. But after accusations by US hedge-fund Hindenburg Research that Gautam Adani’s namesake empire has engaged in “brazen” accounting fraud – charges strongly denied by the Adani Group – small investors gave it a wide berth.
The fact that Adani Enterprises share price continued to trade far below the lower end of the offer range didn’t help the issue either. Adani was trading at Rs 2,948 on Monday, well short of the issue’s lower price band of Rs 3,112. The share has recovered somewhat from Friday when there was a rout in the stock and it fell to a low of Rs 2,748.
Group employees who had been entitled to buy the shares also stayed clear of the issue. The Adani Group’s chief financial officer Jugeshinder Singh had said last year that one of the main aims of the FPO was to diversify the share base and bring in new investors.
Most of the issue was picked up on Tuesday morning by large institutional buyers. Abu Dhabi’s International Holdings Company (IHC) that said it would pick up $400 million has probably been the biggest buyer. IHC, a relatively new player on the global financial markets, is said to be controlled by a key member of Abu Dhabi’s royal family. IHC is taking about 16 per cent of the offering. The latest investment comes on the back of a nearly $2 billion investment in Adani’s companies in 2022.
Adani Group shares have fallen by about $70 billion in the last few days since the scathing report by Hindenburg that specialises in targeting corporate entities which it believes are mismanaged or committing corporate fraud. Hindenburg accused the Adani Group of pulling “the biggest con in corporate history”. The group has called the allegations false and “malicious”.
Tuesday was a bad day in the personal wealth stakes for Gautam Adani who briefly fell off the top 10 world’s richest list. His wealth was reckoned at over $140 billion at one point in 2022 by Forbes Real-Time Billionaires List. His wealth now stands at $89.1 billion. Adani was in 11th place on the index yesterday and is now back in eighth position. The other Big “A” of India’s corporate world – Reliance chief Mukesh Ambani is in 10th position and reckoned to be worth $84.2 billion.
Adani himself appeared unfazed by the charges levelled by the Hindenburg Research and on Tuesday was in Israel to sign a deal to take over Haifa Port. He met Israeli Prime Minister Benjamin Netanyahu and also announced that he planned to develop land in Haifa and establish an artificial intelligence lab in Tel Aviv.
