INDIA: On Friday, India’s Adani Enterprises Ltd. (ADEL.NS) opened a record $2.45 billion secondary share offering for retail investors, days after a short seller targeted the conglomerate run by one of the world’s richest men.
On Wednesday, the market capitalization of Adani Group companies fell by $11 billion as a result of concerns raised in research by Hindenburg Research over debt levels and the usage of tax havens. The report was disregarded by Adani Group as baseless.
The fourth-richest man in the world, Gautam Adani, is the head of the conglomerate Adani Enterprises, which intends to utilise the profits of the share sale to fund capital expenditures and settle a debt.
Investors, including the Abu Dhabi Investment Authority, participated in the anchor portion of the sale on Wednesday.
The retail investor auction opened on Friday and will end on January 31. The company has established a floor price per share of 3,112 rupees ($38.22) and a ceiling price of 3,276 rupees.
In the opening hours of Friday’s market in Mumbai, shares of Adani Enterprises dropped by nearly 6% to 3,189.55 rupees, their lowest level since mid-October. Due to a holiday, Indian marketplaces were closed on Thursday.
Key listed Adani Group companies, according to Hindenburg, have “significant debt,” which puts the conglomerate on “precarious financial footing,” and “sky-high values” have driven the share prices of seven listed Adani companies up to 85% above their true value.
About Adani’s U.S.-traded bonds and non-Indian-traded derivative instruments, Hindenburg claimed to hold short positions in the company, betting that their price would decline.
Concern about debt levels has been raised time and time again by Adani Group and disregarded. It defended itself on Thursday in a presentation titled “Myths of the Short Seller,” claiming that promoters, or significant shareholders, were deleveraging at a “high growth time.”
Adani Group submitted information about its debt and leverage levels, according to a client note from Jefferies, which also stated that it does not “see meaningful risk arising from the Indian banking industry.”
According to Jefferies, the combined gross debt of the Adani Group was 1.9 trillion rupees ($23.34 billion).
According to Adani, its debt is manageable, and no investors have expressed any worries.
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