Adani Enterprises’ ₹20,000 crore FPO will open this week. 10 key points

FPO Occurs when an already listed company makes either a fresh issue of shares or convertible securities to the public or an offer for sale to the public.

Last week, on Friday, Adani Enterprises out of stock 3,456.40 marginally down on the BSE as compared to the previous session. The market cap of Adani Enterprises is around 3,94,029.99 crores.

The price band of the equity shares to be offered under the FPO is currently at a discount of between 5% to 10% to Friday’s closing price.

The proposed fundraising through FPO comes as concerns have been raised about Adani’s high debt level and large promoter shareholding. Earlier, debt research firm CreditSights, part of the Fitch Group, had said that Adani would continue to look for strategic equity partners after the group expressed concerns over increased debt levels. Adani’s total external debt as on September 30, 2022 is approx. 33,517 crores.

Here are 10 key points of FPO.

1. A total of 6,47,38,475 equity shares will be offered to investors under the FPO. The minimum bid lot has been set at four FPO equity shares and in multiples of four FPO equity shares thereafter.

2. Floor price for FPO has been fixed minimum 3,112 per FPO equity share and the cap value is 3,276 per FPO equity share for all categories of investors.

3. Adani has also announced discount 64 per FPO equity share for retail investors bidding under the retail portion of the offer.

4. The bid for the FPO for anchor investors will open on January 25. While the bid for the rest of the investors including retail investors will open on January 27. The last date of the offer has been set as 31 January.

6. The Book-Running Lead Managers of the FPO are — Axis Capital, ICICI Securities, Jefferies India, SBI Capital Markets, BOB Capital Markets, IDBI Capital Markets & Securities, JM Financial, IIFL Securities, Monarch Networth Capital and Elara Capital (India) ). While Axis Bank and ICICI Bank are the sponsor banks for the offer, and Link Intime India is the registrar.

7. Adani’s FPO committee is scheduled to meet on January 25 to decide on the allotment of equity shares to successful anchor investors in the offer and determination of the anchor investor allotment price. Further, the committee will meet on February 1 for approval of the offer price and prospectus. It is being said that the allotment, refund, demat allotment and listing under the offer are expected to take place between February 3 and February 8.

8. If the FPO is fully subscribed then Adani The Rs 20,000 crore offer will be the second largest follow-on public offer in India after Coal India Issue of 22,558 crores in 2015. Earlier in 2020, Yes Bank launched 15,000 crore FPO.

9. The massive share sale by Adani is expected to help the group meet multiple targets. Adani is expected to use a part of the proceeds for capital expenditure requirements and to repay some debt of its units such as Adani Airport Holdings Ltd, Adani Road Transport Ltd and Mundra Solar Ltd. 20,000 crore income of FPO, plans to use 10,869 crore for green hydrogen projects, work on existing airports and construction of greenfield expressways.

10. Adani’s board approved the decision to raise funds in November last year 20,000 crore through FPO and plans to sell 3.5% stake through FPO. Currently, the promoter group’s shareholding in the company is 72.63% or 82,79,49,621 equity shares. While public shareholders hold 27.36% stake in the company.