Indian billionaire Gautam Adani's USD 2.5 billion share sale sclaed up to full subscription on Tuesday, January 31 as investors infused more funds after a tumultuous week for his group in which its stocks were slumped by a scathing short-seller report.
The secondary share sale of Adani Enterprises was subscribed 85 percnet today, including the anchor investor portion, Indian stock exchange data indicated. The share sale needs at least 90 percent subscription to go through. By January 30, the book-building process of the country's largest share sale had received only 3 percent in bids.
Adani Group's stocks have decliend after the January 24 report from Hindenburg Research which flagged concerns about high debt levels and the use of tax havens, with cumulative losses now at USD 65 billion. Gautham Adani has called the report baseless.
The share sale is critical for Gautham Adani , not just because it is India's largest follow-on offering and will help cut debt, but also on account its success will be seen as a stamp of optimism by investors at a time the tycoon faces one of his biggest business and reputational challenges of recent times.
Despite growing concerns that it would not materialise, the Group had in recent days repeatedly affirmed that investors were on its side and that the share offering would go forward. According to Reuters, bankers had at one point thought about changing the issue's pricing or extending the sale.
Support for Adani's share sale came despite the flagship stock's price of Rs. 3,002, which was down from the lower end of the share sale price range of Rs. 3,112 but up about 4%.
According to two sources with firsthand knowledge of the conversations, Adani's company undertook lengthy negotiations with investment bankers and institutional investors throughout the weekend and into Monday in an effort to raise funds.
Retail investor demand remained weak, with offers for only about 9% of the shares up for grabs from that market. Data showed that corporates and overseas institutional investors both made offers on Tuesday that above Rs. 1 million each.
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