The Adani Enterprises FPO was oversubscribed by 112% on its final day despite weak support from retail investors. The FPO saw eager participation from Non-Institutional Investors (NII’s) subscribing to the FPO at 3.32 times to rescue the FPO after low subscriptions in the first and second days amid the Hindenburg mess.
The NII participation included India’s ultra-high-net individuals as reported by Business Standard. The names seemingly included JSW’s Sajjan Jindal, Torrent’s Sudhir Mehta, Zydus’ Pankaj Patel, Airtel’s Sunil Mittal, and Reliance’s Ambani who united to save Adani Enterprises’ FPO from the Hindenburg report’s impact.
The report alleged Adani of “years-long conspiracy of fraud and stock manipulation.”. Indian businessman supported their contemporary amid the allegations from the international research firm as if he was one of their own.
The FPO received a booster with a $400 million investment from International Holding Co. Abu Dhabi. Global entities, Goldman Sachs and Jupiter Asset Management seem to have participated too.
The tanking share of Adani Enterprises couldn’t have been rescued by an oversubscribed FPO and perhaps was a “dud” considering market prices were any case lower than the FPO price.
Adani Group announced on Wednesday, Feb 1 that the FPO was cancelled and investor funds would be returned as it was the right thing to do on “moral” grounds.
The shares of Adani Enterprises were closed at ₹2,135.35 on 1 February, approximately 32% lower than the price band of ₹3,112-3,276 apiece. The share slid further by 26.70% to
₹ 1,565.25 on 2 February. The share saw some relief on Friday, 3 February, gaining 1.38% to close at ₹ 1,586.80 in the volatile week as reported by Investing.Com.
The ill-timed Hindenburg report accused the Adani Group of “brazen” fraud and labelled it as “the largest con in corporate history.” The share of Adani Enterprises continued to remain in the bear court despite the support of the FPO and hit the lower circuit at 2:00 PM, Thursday.
Despite the unity shown by the Indian business fraternity and support from international investors, the market sentiment remains bearish on the Adani Stock. It remains to be seen how the situation is salvaged and after what extent of damage to the personal fortunes of the larger names involved as well as the broader market investor wealth.
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