Adani faces critical day after failed $2.5 billion stock sale

NEW DELHI, Jan 29 (Reuters) – Gautam Adani faces a critical day on Monday, with the Indian billionaire’s shares losing $48 billion on the second day of his parent company’s $2.5 billion stock sale, triggered by a U.S. short-seller report.

Seven listed companies belonging to Adani Group, led by Asia’s richest man, saw their values ​​fall sharply last week after a Hindenburg Research report flagged concerns about high debt levels and the use of tax havens.

Adani Group has issued a detailed announcement Answer As of late Sunday, it has complied with all local laws and made the required regulatory disclosures. It called the report baseless and was considering action against Hindenburg.

The stock market slump is a dramatic setback for Adani, 60, a school dropout who rose rapidly in recent years to become the world’s third-richest person before slipping to seventh on the Forbes list last week.

Second share sale by Adani Enterprises (ADEL.NS) Friday opened for retail and institutional investors, but saw only 1% subscriptions as the company’s stock fell 11% below the minimum offer price.

Adani Group said in a statement to Reuters on Saturday that the sale was on schedule at the planned issue price, with sources saying bankers were considering extending the timeline beyond January 31 or changing the price in the country’s biggest secondary share sale. A fall in its share price.

“It is important for the Adani Group to ensure the share sale — if they stick to the price and don’t cut it, and the stock doesn’t rebound, no one will be interested in applying,” Mumbai said. Ambarish Balika, market analyst, advises various family offices.

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“Monday’s trading will be critical.”

In a separate statement on Sunday, Adani Group Chief Financial Officer Jukeshinder Singh said he was focused on the share sale and hoped it would go through. Its anchor investors have shown confidence and continued to invest, he added.

‘Fall without stopping’

Some shares of the Adani group have risen more than 1,500% in the past three years amid aggressive expansion in businesses including ports, power generation, airports and mining.

Adani Enterprises has fixed the floor price per share at Rs 3,112 and the ceiling for the secondary share sale at Rs 3,276 – up from Rs 2,761.45 on Friday.

Arun Kejriwal, founder of Kejriwal Research and Investments, said investors are likely to wait until the last day of the share sale to see if there is a change in price.

“I expect the free fall seen on Friday to slow down, but recovery to pre-fall levels may be difficult,” he added.

Indian regulations state that an issue of shares must receive a minimum subscription of 90%, otherwise the issuer must repay the entire amount.

Maybank Securities and Abu Dhabi Investment Authority are among the investors bidding for the anchor portion of the issue.

On Saturday, index provider MSCI said it was seeking feedback from market participants on Adani and monitoring factors “that may affect the merits of those relevant securities” in MSCI indices.

There are at least six Adani Group companies in the MSCI India index, with a total weighting of 4.31%.

Reporting by Aditya Kalra, Ira Dugal, Jayshree B Upadhyay and Chris Thomas; Editing by Alexander Smith

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