Adani FPO could have been rigged: US billionaire investor Bill Ackman

After Adani Enterprises' follow-on public offer (FPO) managed to sail through with heavy support from institutional buyers, American billionaire investor Bill Ackman today raised doubts whether India's largest FPO was rigged.

"I would not find it surprising if the Adani Group offering was rigged with affiliated buyers in addition to some real institutional participants like ADIHC. This would explain the low retail participation and today’s price decline," Bill Ackman said on Twitter.

Shares of Gautam Adani's flagship entity crashed over 28% today amid a report that Credit Suisse has stopped accepting bonds of Adani companies as collateral for margin loans.

All 10 stocks belonging to billionaire Gautam Adani's vast empire were reeling under the impact of the Hindenburg report today. While Adani Ports crashed 20%, Adani Total Gas hit a 10% lower circuit. Shares of Ambuja Cement also closed 17% lower.

Credit Suisse has assigned a zero lending value for notes sold by Adani Ports and Special Economic Zone, Adani Green Energy and Adani Electricity Mumbai, according to a Bloomberg report.

Adani stocks have been in a freefall ever since American short-seller Hindenburg Enterprises brought out a report against the ports-to-power conglomerate owned by billionaire Gautam Adani.

In the last five trading sessions, the total market cap erosion in Adani stocks has now extended to over one-third of its value.

Adani Enterprises has so far fallen 49% from its 52-week high and were last trading at Rs 2,129.

Three other group companies — Adani Power, Adani Wilmar and NDTV — also hit their respective 5% lower circuits today.

With strong support from non-institutional investors and qualified institutional buyers (QIB), Adani Enterprises’ FPO had sailed through yesterday with a 112% subscription. Retail investors, however, stayed away from the FPO.

Ever since Hindenburg released a report making several allegations against the Adani Group, the two sides have been engaged in a war of words.

In a 413-page strong rebuttal to the 88 questions asked by the New York-based short-seller, the Adani Group has raised questions on the motivation behind the report and said it is a case of unethical short- selling by a foreign entity by publishing a report to manipulate and depress the price of stock and create a false market.

This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India, Adani had said.

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