Most of Adani Group’s shares plunged Monday as the Indian conglomerate hit back at criticism of a US shortseller but failed to appease investors.
An Indian group headed by Asia’s richest man, Gautam Adani, has butted corners with Hindenberg Research, last week’s short seller who on Sunday expressed concerns about debt levels and the use of tax havens. objected to the report of
Adani said it complies with all local laws and makes the necessary regulatory disclosures.
Adani Transmission, Adani Total Gas, Adani Green Energy, Adani Power and Adani Wilmer were down 5% to 20% on Monday.
Flagship Adani Enterprises, which faces a significant test this week with an additional public offering, teetered between gains and losses before setting higher by 4.8%. It remains well below the offer price in question and, if successful, would be India’s largest such stock offer to date.
Adani Enterprises’ $2.5 billion secondary equity sale ended its second day on weak investor sentiment. The share closed at 2,892.85 rupees ($35.47), 7% below the lower end of the offering price range at 3,112 rupees ($38.17). The upper band is 3,276 rupees ($40.17).
Adani has now received bids for 1.4 million shares, or just over 3%, of the 45.5 million shares on sale, according to Monday’s stock exchange data. Trading closes on Tuesday.
According to data, domestic and foreign institutional investors and mutual funds have not made bids so far.
Heman Jani, equity strategist at Motilal Oswal Financial Services, said: “With current market prices still below offer prices and sentiment hurt by the Hindenburg controversy, there could be a shortage of retail participants. high-performing,” he said.
“There is a risk that the stock sale will not go through, but it will be important today to wait and see how institutional investors participate.”
Abu Dhabi conglomerate International Holding Company said on Monday it would invest 1.4 billion dirhams ($381.17 million) in the sale.
Share sale as planned
The Adani Group told Reuters in a statement on Saturday that the sale is proceeding on schedule at the planned issue price. its stock price fell.
Indian regulations stipulate that a stock offering must receive a minimum of 90% subscription, otherwise the issuer must refund the full amount. Maybank Securities and Abu Dhabi Investment Authority are among his investors bidding on the anchor portion of the issuance.
In a statement, Maybank said there would be “no financial impact” as applications for Adani’s offer are funded entirely by client funds.
India’s state-owned insurance giant Life Insurance Corporation (LIC) told Reuters on Monday that it is reviewing Adani Group’s response to the Hindenburg report and will hold discussions with management in the coming days.
LIC took a 5% stake in the $734 million anchor. It already owns a 4.23 percent stake in its flagship Adani Company, while other exposures include a 9.14 percent stake in Adani Port and a 5.96 percent stake in Adani Total Gas.
“As we are a large investor, we have the right to ask relevant questions,” said Raj Kumar, Managing Director of LIC.
Lower deal
US dollar-denominated bonds issued by Adani Ports and Special Economic Zone continue to fall for the second week in a row, with bonds maturing in August 2027 and falling 5 cents to 73.03 cents, the lowest since June 2020. rice field. The group’s other dollar-denominated bonds are also trading lower.
Index provider MSCI has solicited feedback from market participants regarding Adani and said it is monitoring factors “that may affect the eligibility of the relevant securities” for its MSCI indices.
In Sunday’s response, Adani highlighted his relationships with local and international banks, and his access to diverse sources and structures, including US banks Citigroup and JPMorgan Chase & Co., and Other lenders including BNP Paribas, Credit Suisse, Deutsche Bank, Barclays and Standard Chartered.
The stock market crash is a dramatic setback for 60-year-old Adani. A startling rise in school dropouts has seen some of his group stock rise more than 1,500% of his in three years, before dropping him to No. 8 on Forbes’ list on Monday, before dropping him to number eight in the world. became his third richest person.
In response to Adani’s rebuttal, Hindenburg said the company’s “response largely confirmed our findings and ignored key questions.”
Hindenburg said in a report that Adani companies had “large amounts of debt” and shares in seven Adani-listed companies had fallen 85% due to what the company called “extremely high valuations”. said it does.
Adani’s response said the group has “consistently de-leveraged” over the past decade.
