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Adani Enterprises FPO sails through

Published on Feb 01, 2023 17:33

The follow-on public offer (FPO) of Adani Enterprises received bids for 5,08,68,352 equity shares against the issue size of 4,55,06,791 equity shares. The issue was subscribed 1.12 times.

The portion reserved for retail individual investors (RIIs) was subscribed by 0.12 times with bids of 27,45,960 equity shares as against 2,29,08,464 equity shares reserved for them.

Meanwhile, the portion reserved for qualified institutional buyers (QIBs) received bids for 1,61,03,776 shares as against 1,28,21,336 equity shares reserved for them. It was subscribed 1.26 times.

International Holding Company (IHC), the diversified Abu Dhabi-based conglomerate, announced on Monday (Jan 31) that it would be investing AED 1.4 billion (USD 400 million) into the Adani Enterprises Further Public Offering (FPO), the Indian multinational publicly listed holding company and a part of Adani Group, through its subsidiary Green Transmission Investment Holding RSC Limited.

This is the second investment deal International Holding Company has completed with India`s Adani Group after last year`s Dh7.3 billion (USD 2bn) investment in three green-focused companies of the Adani Group, including Adani Green Energy, Adani Transmission, and Adani Enterprises, which are all listed on the Bombay Stock Exchange and National Stock Exchange of India.

Meanwhile, the non-institutional investors (NII) category was subscribed by 3.32 times, receiving bids for 3,19,30,848 shares as against 96,16,323 shares reserved for them.

The issue also included a reservation of upto 1,60,668 equity shares for eligible employees. The employees category was subscribed 0.55 times against the reserved portion.

The FPO consists of fresh issuance of equity shares for an amount aggregating to Rs 20,000 crore. The price band for the offer was fixed at Rs 3112-3276 per share and the minimum bid quantity is 4 shares. The issue opened for public participation on 27 January 2023 and it will close on 31 January 2023.

Qualified institutional buyers were allotted 50% of the offer. A minimum of 15% of the FPO was reserved for non-institutional bidders and a minimum 35% was allocated to retail individual bidders.

The company proposes to utilise the net proceeds to fund capital expenditure requirements for projects under its subsidiaries and repayment of borrowings. Out of the total proceeds, Rs 10,869 crore will be utilised for funding capital expenditure requirements of some subsidiaries. These include certain projects of the green hydrogen ecosystem, improvement works of existing airport facilities; and construction of greenfield expressway.

Further, Rs 4,165 crore will go for repayment, in full or part, of certain borrowings of our company and three of our subsidiaries, namely, Adani Airport Holdings, Adani Road Transport, and Mundra Solar. The remaining sum would be used for general corporate purposes.

Before the FPO, the Promoter and Promoter Group held 72.63% stake in the company while the remaining 27.37% stake was held by the Public shareholders. Post-FPO, the Promoter holding would be 68.94% and that of the Public would be 31.06%.

Ahead of the FPO, the company on 25 January 2022 raised Rs 5,985 crore from 33 institutional investors by finalising the allocation of 1.83 crore shares under anchor portion at a price of Rs 3,276 a share.

Major foreign institutional investors such as Abu Dhabi Investment Authority (ADIA), Maybank Asia, Goldman Sachs, Nomura, Societe Generale, Jupiter, BNP Paribas, Al Mehwar, Citi Group, Morgan Stanley picked up stake.

Adani Enterprises is the flagship company of Adani Group, one of India`s largest business conglomerates. The company`s business investments are centered on the fields of airport management, technology parks, roads, data centre and water infrastructure.

On consolidated basis, the company`s net profit surged 117% to Rs 460.94 crore on 188% jump in net sales to Rs 38,175.23 crore in Q2 FY23 over Q2 FY22.

Meanwhile, shares of Adani Enterprises slumped 28.45% to end at Rs 2128.70 on the BSE today.

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