The timing could not have been worst for Gautam Adani’s ₹20,000 crore follow-on public offer (FPO) which came at a time when investors were offloading their positions in the group’s seven listed stocks extensively. It was a bloodbath on Friday, with Adani stocks hitting lower circuits and some of them even witnessing a double-digit decline. The reason behind the free fall in Adani stocks would be Hindenburg Research’s allegations over the Group. However, Adani has fought back by giving a much clear picture of its business portfolio.
On Friday, Adani Transmission, Adani Green Energy, and Adani Total Gas closed at 20% lower circuits each. While Adani Power and Adani Wilmar hit 5% lower circuits each. Adani Ports wasn’t performing any better and tumbled by over 16% at the end of the day.
Meanwhile, Adani’s flagship company, Adani Enterprises, which launched its FPO on Friday, nosedived by around 20% before closing at ₹2,762.15 apiece on BSE.
The first day of the FPO saw muted demand across investors.
Under the ₹20,000 crore worth FPO, on Friday, only 4,70,160 equity shares were bid against the offered size of 4,55,06,791 equity shares. The price band for the FPO is set from ₹3,112 to ₹3,276 per FPO equity share for all categories of investors.
If Adani’s FPO is fully subscribed, then this will become the second largest follow-on public offer in India after Coal India’s ₹22,558 crore issue in 2015. Earlier in 2020, Yes Bank had launched a ₹15,000 crore FPO.
But circumstances changed drastically a few days before Adani’s FPO and it would be Hindenburg Research’s report under which it accused Adani of stock manipulation and fraud schemes.
In its report on January 24, the New York-based investment research firm said, “we reveal the findings of our 2-year investigation, presenting evidence that the ₹17.8 trillion ($218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.”
