No change in FPO price, schedule: Adani Group

MUMBAI: Amid speculation that Adani Enterprises may be forced to amend its Rs 20,000-crore follow-on public offer after a plunge in its stock price, the Ahmedabad-based company clarified that its FPO remains on schedule at the set issue price.
The flagship of the Adani Group had fixed the FPO at Rs 3,112-Rs 3,276 per share. However, on Friday, the first day of retail bidding for the FPO, the stock closed at Rs 2,762 on BSE. This led to speculation that it may revise the issue size or sale period.
Clarifying that there is “no change in either the schedule or the issue price” of its Rs 20,000-crore follow-on offering, the Adani Group said on Saturday, “All our stakeholders including bankers and investors have full faith in the FPO. We are extremely confident about its success.”
The clarification came even as index provider MSCI said Saturday that it was monitoring the situation on the Adani Group and the “factors that may impact the eligibility of its securities for the MSCI Global Investable Market Indexes”. All Adani Group stocks except Adani Wilmar are in the MSCI Index.
Adani Enterprises’ stock tumbled 18% on Friday after a report by US-based researcher Hindenburg accused the Adani Group of “brazen stock manipulation” and “accounting fraud” via a “vast labyrinth of offshore shell entities”. The group has dismissed the report as baseless.
On Friday, the FPO attracted just 1% of its targeted number of subscribers, raising concerns over whether the issue is in jeopardy.
Kirtan Shah, founder of Credence Wealth Advisors tweeted: “The FPO most likely won’t fail as there are underwriters to the issue and they will have to buy it out. Plus, Adani can also reduce the price of the FPO if need be.” The FPO closes on January 31.
InGovern founder Shriram Subramanian said: “Rules allow a company to revise the FPO price or extend the sale period. It also allows the entity to withdraw the FPO, if the issue doesn’t meet the targeted subscription level.”
On January 25, the anchor book worth Rs 5,985 crore, a part of the QIB portion, was fully subscribed. The anchor investors had subscribed to the issue at Rs 3,276 apiece, the upper end of the price band.
In its FPO document, Adani Enterprises said, “Qualified institutional buyers (QIBs) and non-institutional investors are not allowed to withdraw or lower their bid quantity/amount at any stage but retail investors and employees can revise their bids during the FPO period or withdraw their bids until the closing date of the issue.”