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Adani Enterprises FPO sails through on last day

Feb 1, 2023

By: BlinkX Research Team

It looked like touch and go, but the Rs20,000 crore FPO of Adani Enterprises eventually sailed through on 31st January 2023. The subscription of the issue assumed special significance as the global short seller, Hindenburg Research, had deliberately timed its bunch of frothy allegations on Adani group ahead of the FPO of Adani Enterprises. The idea was to sabotage the FPO; but eventually that did not happen as the company managed to ensure the FPO sails through.

The FPO of Adani Enterprises was subscribed 1.12 times overall with maximum bids coming from the HNI / NII segment, which got subscribed 3.32 times. Within the HNI / NII category, the B-HNI  category (bids above Rs10 lakhs) was subscribed 4.97 times, showing a lot of demand from corporate bodies and family offices. The QIB portion (net of anchor) got subscribed 1.26 times, which was critical as QIB portion needs to be subscribed for the FPO to go through.

The weak sentiments impacted retail demand, especially considering that the IPO price was above the upper circuit price on the last day. That really dampened retail sentiments. The retail portion got just 12% subscribed while the employee quota was subscribed 55%. Even in the HNI / NII quota, the S-HNI portion (Rs2 lakh to Rs10 lakh) got just 2% subscription.

The feedback was that several ultra-HNIs had put money in the FPO through their family offices. Mutual funds did not participate at all in the FPO, like the anchor portion. Meanwhile Abu Dhabi based IHCL had committed to invest Rs3,200 crore in the FPO. The company had already allotted shares Rs5,985 crore to anchor investors. The FPO entails 50% payment upfront on application and the balance on call at a future date. Maybank Securities had absorbed nearly one-third of the anchor portion.