The Rs 20,000 crore ($2.5 billion) Adani Enterprises, the flagship company of the Adani Group, has had a weak start. Follow-on Public Offer (FPO), With only 1% subscription on the first day of the share sale. The price of this offer, which runs till January 31, 2023, is between Rs 3,112 and Rs 3,276.
Retail investors bid for around 4 lakh shares out of the 2.29 crore shares reserved. In comparison, qualified institutional buyers (QIBs) called for only 2,656 shares out of 1.28 crore reserved for them. Non-institutional investors subscribed for 60,456 shares out of 96.16 lakh shares on offer. Despite this, Adani Group CFO Jugshinder Singh is confident that the Rs 20,000 crore issue will be successful.
Adani Enterprises raised Rs 5,985 crore from anchor investors, giving a boost to the FPO ahead of the share sale. The company allotted 1.82 crore equity shares at Rs 3,276 each to 33 funds, which had foreign investors including Abu Dhabi Investment Authority, BNP Paribas Arbitrage and Goldman Sachs, participating in the anchor book.
Several domestic institutional investors including LIC and SBI Life Insurance Company participated. Out of the proceeds from the offer, Rs 10,869 crore will be used for green hydrogen projects, works at existing airports and construction of greenfield expressways.
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Adani Enterprises said in a filing to the Bombay Stock Exchange that in case the offer price is lower than the anchor investor allotment price, the difference will not be funded to anchor investors. The FPO committee is scheduled to meet on February 1 to approve the offer price and prospectus.
general question
Q1. What is Adani Enterprises Follow-on Public Offer (FPO)?
a: Adani Enterprises Follow-on Public Offer (FPO) is a public share sale of Adani Enterprises Limited, the flagship company of the Adani Group.
Q2. How has the response to the Adani Enterprises FPO been received so far?
a: Response to the Adani Enterprises FPO has been sluggish, with only 1% shares being subscribed on the first day of the share sale.