Adani Enterprises FPO Subscribed 3% On Day 2
The FPO was subscribed 3% or 0.03 times, as of 5:00 p.m. on Jan. 30.
The demand for Adani Enterprises Ltd.'s follow-on public offering was spearheaded by employees reserved, followed by retail investors.
The Rs 20,000 crore FPO was subscribed 1% on the opening day.
The Adani Group is confident of its flagship firm's follow-on public offering will be fully subscribed even as the conglomerate responded in detail to Hindenburg Research's accusations, alleging that the report of the U.S.-based firm is unsubstantiated and misleading.
The FPO will be fully subscribed and backed by institutional investors, Jugeshinder Singh, chief financial officer at Adani Group, said in an interview with BQ Prime.
Adani Enterprises Ltd. launched its follow-on public offering on Friday.
The Adani Group's flagship company is offering shares on a partially paid basis, aggregating up to Rs 20,000 crore, it said in its red herring prospectus filed with the markets regulator.
The company has pegged the floor price for the issue at Rs 3,112 per share and the cap price at Rs 3,276 apiece, according to the red herring prospectus.
It is also offering a discount of Rs 64 per share to retail investors. The minimum bid lot for the FPO will be four equity shares. Buyers can bid for multiples of four equity shares, thereafter.
On application, bidders will have to pay half of the offer price upfront, while the balance amount will have to be paid on one or more subsequent calls, the same as the anchor portion.
According to the filing, the Gautam Adani-led firm will use the proceeds from the FPO to repay debt worth Rs 4,165 crore for itself and its units. It will utilise around Rs 10,869 crore for capital expenditure in the group's airport and green energy projects. The rest will be deployed for general corporate purposes.
Subscription Details: Day 2
The FPO was subscribed 3% or 0.03 times, as of 5:00 p.m. on Jan. 30.
Institutional investors: 0 times.
Non-institutional investors: 0.04 times.
Retail investors: 0.04 times.
Employees: 0.13 times.
"We are confident that despite share price volatility they are staying with the transaction," Singh said. "They are ignoring the extreme volatility of the last day. The FPO will be subscribed fully as the institutional demand itself is high."
Singh said there could be some impact to the retail participation in the FPO as the current market price is below the issue price band. "We don't know what will be the final structure in the FPO but there could be some reduced participation by the retail investor."
"We want to end up in the long term where we have significant retail participation. We are confident that we will achieve this."