Adani bets on big funds for Rs 20k cr FPO

MUMBAI: Institutional investors are fully supporting the next public offering (FPO) of Rs 20,000 for Adani Enterprises (AEL) despite the share being below the asking price. A top Adani Group executive said the reason for this confidence is that institutional investors see high value in the companies AEL is incubating in its field.
When it comes to retail investors, the company isn’t sure how they’ll take matters into account at current market prices. However, it is believed that some high net worth and ultra high net worth investors (UHNI) will participate in it.
“People invest in AEL not because they see value, but because the asset is incubated. Adani Airport, Adani New Industries, Adani Roads, Adani Digital and Adani Datacentres have value,” team CFO Jugeshinder Singh told TOI. “If they are shareholders of AEL, then when these businesses are split up, they get those shares. The underlying value hasn’t changed at all… they want the assets (baseline). infrastructure) in the future,” Singh said.
The group’s head of finance believes AEL’s strategic investors will not ‘blatantly lie’ about their proposed investments in the offering. “They have confirmed that they are participating (in the FPO) and we believe their participation will become apparent in the next two days. Because our organization’s participation exceeds the value of what we’re mobilizing, we believe the FPO will go as planned.”
However, the company is not sure how retail investors will behave, as the current market price is lower than the FPO price. On Friday, shares on the BSE closed at Rs 2,762 versus Rs 3,112 – the lower end of the price range for the offer. “We’ll see how it (the retail part) plays out. (Some) Ultra HNI and HNI will definitely be involved as we already know. Also, it’s hard to comment at this stage.” Singh said.
On Tuesday, just days before the launch of the FPO, Hindenburg Research, a US-based short-selling firm, released a 32,000-word report alleging fraud and misconduct by the Adani Group . As a result, from Wednesday to Friday, the group’s shares fell by as much as 25%, raising questions about the success of AEL’s massive funding offer.
When asked if the group has a contingency plan if the FPO doesn’t go through, Singh said the difference between AEL’s current move and that of other companies is that it needs capital for high growth rates. than. On the other hand, some companies raise capital to survive.
“Our funding is related to the growth we’re aiming for. We want to raise this capital to accelerate certain parts of our growth,” he said. “We can always slow down the growth in the middle because we have this strategic flexibility, because we never borrow money just for corporate purposes, we always raise capital for that purpose.” for the purpose of creating assets and based on the rate of return.”
Regarding the lack of presence of mutual funds in the country among institutional investors, Singh said that since AEL is an infrastructure company, its institutional shareholders are mostly long-term players. such as life insurance companies, pension funds, and sovereign wealth funds, not mutual funds. “The first time at least the biggest (fund house) registered, it was SBI MF,” he said.
On the matter of the legal action the group has threatened against the Hindenburg Research, Singh said that the companies in the group will provide all information to the group’s legal team and then they will decide the course of further action. according to the.


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