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Adani’s $2.5 billion share sale faces crucial day after rout

People walk past an electronic sign displaying news on the Adani Group at the Bombay Stock Exchange building in Mumbai on Jan. 27, 2023. Trading in the business empire of Asia’s richest man Gautam Adani was halted following a 15% plunge in its share price, days after a U.S. investment firm claimed it had committed “brazen” corporate fraud.

Sujit Jaiswal | AFP | Getty Images

Gautam Adani faces a critical day on Monday with his flagship company’s $2.5 billion share sale’s second day of bidding overshadowed by a $48 billion rout in the Indian billionaire’s stocks which was sparked by a U.S. short seller’s report.

Seven listed companies belonging to the Adani conglomerate, which is led by Asia’s richest man, saw sharp falls in their values after Hindenburg Research report last week flagged concerns about high debt levels and the use of tax havens.

Adani Group issued a detailed response late on Sunday, saying it complies with all local laws and had made necessary regulatory disclosures. It has called the report baseless and said it was considering taking action against Hindenburg.

For 60-year-old Adani, the stock market meltdown has been a dramatic setback for a school-dropout who rose swiftly in recent years to become the world’s third richest man, before slipping to rank seventh on the Forbes list last week.

The secondary share sale by Adani Enterprises opened for retail and institutional investors on Friday, but saw only 1% subscriptions as the company’s stock fell 11% below the minimum offer price.

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

“It is important for the Adani Group to ensure the share sale goes through — If they stick to the price and don’t reduce it, and the stock doesn’t bounce back, nobody will be keen to apply,” said Mumbai-based market analyst, Ambareesh Baliga, who advises various family offices.

“Monday’s trade will be critical.”

In a separate statement on Sunday, Adani Group’s chief financial officer Jugeshinder Singh said it is focused on the share sale and is confident it will sail through. He also said its anchor investors have shown faith and remain invested.

‘Free fall’

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