Adani Enterprises Shares Increase, While Other Group Shares Extend Losses Due To The Hindenburg Tragedy
Adani Transmission, Adani Total Gas, and Adani Green Energy all experienced 20% declines on Monday. In addition, Adani Ports and the Special Economic Zone decreased by 0.5%, while Adani Power and Adani Wilmar both saw declines of 5%.
The majority of Adani Group shares continued to fall sharply on Monday as investors remained unconvinced by the Indian conglomerate’s response to criticism from a U.S. short-seller, pushing the companies’ combined stock market losses to $66 billion over three days.
Flagship Adani Enterprises, which will be put to the test with a follow-on share offering this week, increased 4%, but this was well below the offer price and off initial gains of as much as 10%.
The company Adani, run by Asia’s richest man Gautam Adani, has been at odds with Hindenburg Research and responded on Sunday to a report from the short-sellers that raised issues with the company’s debt levels and use of tax havens. Adani asserted that it has made the required regulatory disclosures and complies with all local laws.
Adani Transmission, Adani Total Gas, and Adani Green Energy all experienced 20% declines on Monday. In addition, Adani Ports and the Special Economic Zone decreased by 0.5%, while Adani Power and Adani Wilmar both saw declines of 5%.
Weak investor sentiment entered the second day of Adani Enterprises’ $2.5 billion secondary share sale. As a result, the share price ranged from 3,112 to 3,276 rupees and was significantly lower than the stock’s current trading price of 2,892 rupees.
The issue received 1% more subscriptions on Friday, the first day of the offer, despite a larger decline in stock prices.
According to preliminary information from stock exchanges on Monday, Adani has received bids for 687,840, or 1.5%, of the 45.5 million shares for sale. On Tuesday, the deal will be finalised.
According to the data, neither domestic nor international institutional investors nor mutual funds have placed bids.
Hemang Jani, the equity strategist at Motilal Oswal Financial Services, said: “Retail participation is likely to have a shortfall with current market prices still trailing the offer price and sentiment taking a hit due to the Hindenburg controversy.”
Even though there is a chance the share sale won’t go through, it will be important to watch to see how institutional investors participate right now.
Despite reports that bankers for the largest secondary share sale in the nation were considering extending the deadline past January 31 or adjusting the price due to the decline in the company’s share price, Adani Group said in a statement to Reuters on Saturday that the sale is still proceeding as planned at the planned issue price.
According to Indian regulations, the minimum required subscription for the share offer is 90%, and if it falls short, the issuer must refund the full amount. Maybank Securities and Abu Dhabi Investment Authority are among the bidders for the anchor portion of the issue.
According to a statement from Maybank, the subscription to Adani’s offer was entirely funded by client funds, so “there is no financial impact.”
Life Insurance Corporation (LIC), a state-run insurance giant, contributed as well, taking 5% of the anchor portion, or roughly $734 million. It already owns 4.23% of the major Adani company and has a 9.14% stake in Adani Ports and a 5.96% stake in Adani Total Gas.
Also Read | Kotak Reduces Adani Ports’ Target Price To Rs 860 And Upgrades The Rating To ‘Buy.
