The majority of Adani Group shares continued to decline sharply on Monday as investors remained unconvinced by the conglomerate’s response to criticism from American short-sellers, pushing the companies’ combined stock market losses to $66 billion over the previous three days.
Flagship Adani Enterprises (ADEL.NS), which will be put to the test this week with a carry-on share offering, increased by 4%, but this was much below the offer price and off earlier gains of up to 10%.
Gautam Adani, the richest man in Asia, heads Adani, which has fought with Hindenburg Research and responded on Sunday to a report by short-sellers last week that raised issues with the company’s debt levels and usage of tax havens. Adani asserted that it has made the required regulatory disclosures and conforms with all local regulations.
Adani Transmission (ADAI.NS), the renowned Adani Total Gas (ADAG.NS), as well as Adani Green Energy (ADNA.NS) all had 20% declines on Monday. Adani Power (ADAN.NS), Adani Wilmar (ADAW.NS), and Adani Ports as well as Special Economic Zone (APSE.NS) all had declines of at least 5%.
Weak investor enthusiasm entered the second day of Adani Enterprises’ $2.5 billion second share offering. The share price, which ranged from 3,112 to 3,276 rupees, was significantly lower than the stock’s current trading price of 2,892 rupees.
The issue received 1% more subscriptions on Friday, the initial day of the sale, despite a general decline in stock prices.
Preliminary information from stock exchanges on Monday showed Adani has now received offers for 687,840, or about 1.5%, out of the 45.5 million shares that are up for sale. On Tuesday, the agreement is finalised.
Data claimed neither domestic nor international institutional investors, nor mutual funds, have placed any offers thus far.
Hemang Jani, an equities strategist at the renowned Motilal Oswal Financial Services, predicted that retail participation would fall short because the mood was affected by the Hindenburg issue and current market prices were still below the offer price.
Even though there is a chance the share sale won’t go through, it will be important to watch today to observe how institutional investors react.
Even though sources claimed bankers of the nation’s largest secondary stock offering were considering broadening the timeline beyond January 31 or adjusting the price due to the decline in its share price, Adani Group said in a statement issued on Saturday that the sales remain on schedule at the designed issue price.
Domestic legislation believed the share offer must obtain a minimum of 90% in subscriptions; otherwise, the issuer is required to repay the full cost.
Among the investors who submitted bids for the anchor portion of the offering was Maybank Securities & Abu Dhabi Investment Authority.
There is no financial consequence, according to Maybank, because the commitment to Adani’s offer was fully paid by client funds.
Life Insurance Corporation (LIC) (LIFI.NS), a well-known state-run insurance goliath, also made an investment, taking 5% of the anchor component, or roughly $734 million.
It already owns 4.23% of the main Adani company, and it also has a 9.14% holding in Adani Ports and a 5.96% stake in Adani Total Gas.
The maker of the indices, MSCI, stated on Saturday that it was looking for market players’ opinions on Adani and that it was keeping an eye on any variables that would affect whether or not the pertinent equities were included in MSCI indexes.
The MSCI index contains at least six Adani Group firms, with a total weight of 4.31%.
The possibility of the stocks being dropped from the MSCI exists. This may not occur right once, but according to Deven Choksey, the founder and executive director of KR Choksey Group, those funds that purchased it based on the MSCI will be asked by their investors to discontinue the position.