Adani says $2.5 billion share sale on track even as bankers mull changes

Three people familiar with the matter told Reuters on Saturday that bankers on the deal were considering increasing sales or cutting the issue price after Adani’s shares fell.

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

“All our stakeholders including bankers and investors have full faith in the FPO (follow up public offer). We are extremely confident of the success of the FPO.”

Seven listed companies from a group controlled by one of the world’s richest men, Gautam AdaniA combined $48 billion in market value has been lost since then. Hindenburg The research on Tuesday flagged concerns about debt levels and their use of tax havens.

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

Sources had said that among the options being considered by bankers was to extend the date of closure of membership by four days on Tuesday.

Shares of group flagship Adani Enterprises plunged 20% on Friday, dragging it 11% below the minimum offer price of the secondary sale.

On its first day of retail bidding on Friday, the issue attracted about 1% of its target subscriber base, raising concerns about whether it would be able to take off.

Stock exchange data showed investors, mostly retail, placed bids for about 470,160 shares out of the 45.5 million shares on offer.

A source said, “Everyone was shocked. They didn’t expect such a bad reaction.”

Sources said the other option being considered by bankers is to reduce the price, with one saying it could be reduced by up to 10%.

Adani had set a floor price of Rs 3,112 ($38.22) per share and a cap of Rs 3,276 – much higher than their close of Rs 2,761.45 on Friday.

Sources said a decision is expected on Monday.

Sumit Agarwal, managing partner, RegStreet Law Advisors and a former official at the capital markets regulator of India, said, “Revision of the price band or extension of time of a public issue can technically be done with a newspaper advertisement and issue of an addendum.”

The sale is being managed by Jefferies, SBI Capital Markets of India and ICICI Securities. He did not immediately respond to requests for comment.

The Hindenburg Report has raised questions about how the Adani group used entities in offshore tax havens such as Mauritius and the Caribbean islands.

It said major listed Adani companies had “substantial debt”, putting the entire group on a “precarious financial footing”.