India’s Adani says $2.5b share sale on track even as bankers mull changes

A $2.5 billion share sale by India’s Adani Enterprises remains on schedule at the planned issue price, the company told Reuters on Saturday, while sources said bankers were considering changes due to a market rout in the group’s shares.

Bankers on the deal were considering extending the sale or cutting the issue price after shares of Adani plunged following a report from a US short seller, three people familiar with the matter told Reuters on Saturday.

Adani Group in a statement said: “There is no change in either the schedule or the issue price.”

“All our stakeholders including bankers and investors have full faith in the FPO (Follow on Public Offer). We are extremely confident about the success of the FPO,” it said.

Among the options the bankers are considering are to extend the Tuesday closing date for the subscription of the issue by four days, the sources told Reuters on Saturday.

Seven listed companies of the conglomerate controlled by one of the world’s richest men, Gautam Adani, have lost a combined $48 billion in market value since Hindenburg Research on Tuesday flagged concerns about debt levels and the use of tax havens.

The Adani Group has called the report baseless and said it was considering taking action against Hindenburg.

Friday’s 20 per cent fall in shares of group flagship Adani Enterprises dragged it 11 per cent below the minimum offer price of the secondary sale. On first day of retail bidding on Friday, the issue was subscribed around 1 per cent, raising concerns over whether it would be able to proceed. “Everyone was shocked. They did not expect such a poor response,” one source said.

The Hindenburg report questioned how the Adani Group used entities in offshore tax havens such as Mauritius and the Caribbean islands. It said key listed Adani companies had “substantial debt”, which put the entire group on a “precarious financial footing”.