Adani FPO opens Jan 27 at Rs 3,112-3,276 per share

Mumbai: Adani Enterprises will sell shares in its upcoming ₹20,000-crore follow-on public offer (FPO) in the price band of ₹3,112-3,276 apiece, which is 8-13% below Wednesday's closing price, according to stock exchange disclosures.

The issue will open for bids on January 27 and close on January 31, said the company's offer documents filed with stock exchanges.

The flagship entity of the Adani Group will use the money raised in the share sale to cut debt and expand. It plans to utilise ₹4,165 crore to repay debt, while ₹10,869 crore will be for expansion, said the offer documents.

Anchor Investor Bids on Jan 25
Adani Enterprises had debt of ₹41,191 crore as on September 30, 2022.

Shares of Adani Enterprises fell 1.2% to close at ₹3,595.35 on Wednesday. The stock has rallied 95% in the past year.

The company will offer partly paid shares to retail investors at a discount of ₹64 apiece to the issue price. Investors must pay 50% of the offer price at the time of placing bids in the FPO, and the remaining 50% on one or more subsequent calls, as decided by the board.

Investors must bid for at least four shares and in multiples of four thereafter. Adani Enterprises will sell shares to anchor investors on January 25.

According to the offer documents, Adani Enterprises proposes to use ₹4,165 crore of the issue proceeds to repay debt owed by the company and three subsidiaries - Adani Airport Holdings, Adani Road Transport and Mundra Solar. It intends to spend ₹10,869 crore of the money raised for projects including the green hydrogen ecosystem, airport facilities and construction of a greenfield expressway.

In the FPO, 50% of the net offer has been reserved for qualified institutional buyers, while 15% is for non-institutional investors. About 35% is for retail investors.

Adani Enterprises has appointed 10 bankers to manage the issue, including Jefferies India, ICICI Securities, SBI Capital Markets, BOB Capital Markets, IDBI Capital, JM Financial, IIFL Securities, Monarch Networth and Elara Capital.

The FPO could result in the stakes of promoters, led by Gautam Adani, falling by 3.5%. As of September 2022, the promoters owned 72.63% of Adani Enterprises, while the remaining 27.37% was with public shareholders.

Among the public shareholders, Life Insurance Corporation of India held 4.03%, while Nomura Singapore, APMS Investment Fund, Elara India Opportunities Fund and LTS Investment Fund owned 1-2% each.

The Adani FPO application was made through the 'fast-track' mechanism. Listed companies looking to raise money through FPOs can speed up the regulatory approval process if they meet certain conditions under Securities and Exchange Board of India (Sebi) regulations. Such companies must apply to one or more stock exchanges to seek in-principle approval for listing their specified shares.