Despite lenders considering adjustments, India’s Adani claims the $2.5 billion share sale is still on schedule.
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The Indian business Adani Enterprises told Reuters on Saturday that a $2.5 billion share sale is still on track and will be completed at the intended issue price, despite bankers reportedly considering adjustments because of the group's stock market decline.
After Adani's shares fell following a claim from a US short seller, the deal's bankers were considering extending the offer or lowering the issue price, three people with knowledge of the situation told Reuters on Saturday.
There has been no change to the timeline or the issue price, according to a statement from Adani Group.
"Everyone involved with us, including our bankers and investors, has complete trust in the FPO (Follow on Public Offer). About the FPO's success, we are incredibly optimistic ", it read.
Since Hindenburg Research on Tuesday raised concerns about the conglomerate's use of tax havens and debt levels, seven of its listed companies—which are owned by the conglomerate Gautam Adani, one of the richest individuals in the world—have had their market value decline by a combined $48 billion.
The Adani Group reacted to the claim as being unfounded and declared that it was thinking about pursuing legal action against Hindenburg.
A four-day extension to the deadline for subscriptions on Tuesday was one of the alternatives the lenders were reportedly mulling, according to sources.
The group's flagship Adani Enterprises' share price fell 20% on Friday, dragging it 11% below the secondary sale's minimum offer price.
The issue only drew around 1% of its intended subscriber base on the first day of retail bidding on Friday, raising doubts about its viability.
According to stock market statistics, buyers, largely individual investors, placed bids on around 470,160 of the 45.5 million shares that were up for grabs.
"Everybody was stunned. Such a subpar response was not anticipated, "said one insider.
One of the sources claimed that lenders are also considering cutting the price, which might be reduced by as much as 10%.
Adani set a floor price of 3,112 rupees ($38.22) and a ceiling price of 3,276 rupees, which are both significantly higher than the stock's Friday finish of 2,761.45 rupees.
According to the sources, a decision was anticipated on Monday.
Former official of the Indian capital markets regulator and managing partner at Regstreet Law Advisors Sumit Agrawal remarked, "Revision in price band or time extension of public issuance can theoretically be conducted with a newspaper advertisement and releasing an amendment."
Among others, the transaction is being managed by Jefferies, SBI Capital Markets in India, and ICICI Securities. Requests for comment were not immediately answered.
How the Adani Group utilised organisations in offshore tax havens like Mauritius and the Caribbean islands was called into question in the Hindenburg investigation.
It said that significant debt held by major Adani entities that are publicly traded put the entire company on "precarious financial footing."
The Indian business Adani Enterprises told Reuters on Saturday that a $2.5 billion share sale is still on track and will be completed at the intended issue price, despite bankers reportedly considering adjustments because of the group’s stock market decline.
After Adani’s shares fell following a claim from a US short seller, the deal’s bankers were considering extending the offer or lowering the issue price, three people with knowledge of the situation told Reuters on Saturday.
There has been no change to the timeline or the issue price, according to a statement from Adani Group.
“Everyone involved with us, including our bankers and investors, has complete trust in the FPO (Follow on Public Offer). About the FPO’s success, we are incredibly optimistic “, it read.
Since Hindenburg Research on Tuesday raised concerns about the conglomerate’s use of tax havens and debt levels, seven of its listed companies—which are owned by the conglomerate Gautam Adani, one of the richest individuals in the world—have had their market value decline by a combined $48 billion.
The Adani Group reacted to the claim as being unfounded and declared that it was thinking about pursuing legal action against Hindenburg.
A four-day extension to the deadline for subscriptions on Tuesday was one of the alternatives the lenders were reportedly mulling, according to sources.
The group’s flagship Adani Enterprises’ share price fell 20% on Friday, dragging it 11% below the secondary sale’s minimum offer price.
The issue only drew around 1% of its intended subscriber base on the first day of retail bidding on Friday, raising doubts about its viability.
According to stock market statistics, buyers, largely individual investors, placed bids on around 470,160 of the 45.5 million shares that were up for grabs.
“Everybody was stunned. Such a subpar response was not anticipated, “said one insider.
One of the sources claimed that lenders are also considering cutting the price, which might be reduced by as much as 10%.
Adani set a floor price of 3,112 rupees ($38.22) and a ceiling price of 3,276 rupees, which are both significantly higher than the stock’s Friday finish of 2,761.45 rupees.
According to the sources, a decision was anticipated on Monday.
Former official of the Indian capital markets regulator and managing partner at Regstreet Law Advisors Sumit Agrawal remarked, “Revision in price band or time extension of public issuance can theoretically be conducted with a newspaper advertisement and releasing an amendment.”
Among others, the transaction is being managed by Jefferies, SBI Capital Markets in India, and ICICI Securities. Requests for comment were not immediately answered.
How the Adani Group utilised organisations in offshore tax havens like Mauritius and the Caribbean islands was called into question in the Hindenburg investigation.
It said that significant debt held by major Adani entities that are publicly traded put the entire company on “precarious financial footing.”
