The sale of Adani’s $2.5 billion shares faces a critical day after defeat

NEW DELHI (Reuters) – Gautam Adani faces a critical day on Monday as the auction day of the $2.5 billion sale of shares of his flagship company is overshadowed by a $48 billion drop in the Indian billionaire’s shares, which was triggered by a US short seller’s report. .

Seven listed companies belonging to the Adani Group, which is led by Asia’s richest man, saw their values ​​drop sharply after a Hindenburg Research report last week cited concerns about high debt levels and the use of tax havens.

Al-Adani Group issued a breakdown Response late Sunday, saying it complies with all local laws and made the necessary regulatory disclosures. She called the report unfounded and said she was considering action against Hindenburg.

For the 60-year-old Adani, the stock market crash was a dramatic setback for a school dropout who rose rapidly in recent years to become the third richest man in the world, before slipping to number seven on the Forbes list last week.

Secondary stock sale by Adani Enterprises (ADEL.NS) It opened to retail and institutional investors on Friday, but saw subscriptions of just 1% as the company’s stock fell 11% below its minimum bid price.

The sale remains on schedule at the planned issue price, Adani Group told Reuters in a statement on Saturday, even as sources said bankers in the country’s largest secondary share sale were considering extending the schedule beyond Jan. 31, or adjusting the price due to declines. in its share price.

“It is important that the Adani Group ensures that the shares continue to be sold – if they stick to the price and don’t cut it, and the stock doesn’t bounce back, then no one will be keen on going forward,” Mumbai said. Market Analyst, Ambaresh Palega, who advises several family offices.

Monday’s trade will be crucial.

In a separate statement on Sunday, Group Chief Financial Officer Adani Jugeshinder Singh said it was focused on selling the shares and was confident it would be successful. He also said that the main investors showed faith and continued to invest.

“free fall”

Some shares of the Adani Group have risen more than 1,500% in the past three years amid the massive expansion of businesses that include ports, power generation, airports and mining.

Adani Enterprises has set a minimum price of 3,112 rupees per share and a maximum price of 3,276 rupees for the sale of the secondary shares – well above its closing of 2,761.45 rupees on Friday.

Arun Kejriwal, founder of Kejriwal Research & Investment, said investors are likely to wait until the last day of selling shares to see if the price range has adjusted.

“I expect the free fall seen on Friday to ease, but returning to the level prior to this fall could be difficult,” he added.

Indian regulations state that an offer of shares must get a minimum 90% subscription, and if not, the issuer must refund the entire amount.

Among the investors who submitted bids to buy the main part of the issue are Maybank Securities and the Abu Dhabi Investment Authority.

On Saturday, index provider MSCI said it was seeking feedback from market participants on Adani and was monitoring factors that “may affect the eligibility of those relevant securities” in the MSCI indexes.

There are at least six Adani Group companies in the MSCI India index, with a cumulative weight of 4.31%.

Additional reporting by Aditya Kalra, Ira Duggal, Jayshree P Upadhyay and Chris Thomas; Edited by Alexander Smith

Our standards: Thomson Reuters Trust Principles.