Adani’s FPO fully subscribed as high net worth individuals offset retail wariness

The Adani Group building at Adani Shantigram near Ahmedabad
| Photo Credit: Vijay Soneji

The ₹20,000 crore follow-on public offer from Adani Enterprises Ltd. (AEL) was fully subscribed on the last day of the record share sale on Tuesday, after high net worth individuals and institutional investors bid strongly and more than made up for a poor to tepid response from retail investors and employees.

The successful conclusion of the Adani Group flagship company’s FPO will come as a major relief to its promoters led by India’s richest individual Gautam Adani in the wake of a U.S.-based short seller’s allegations of accounting irregularities and stock manipulation at the group which led to a three-session rout in the conglomerate’s shares.

The FPO finally received bids for 1.12 times the 4.55 crore shares on offer, according to cumulative demand data on the BSE website. While Qualified Institutional Bidders (QIBs) led by FIIs sought 1.26 times the shares offered to them as a category, Non Institutional Investors (NIIs) bid for 3.32 times the stock reserved for them as a class, with NIIs placing a bid exceeding ₹10 lakh seeking to buy 4.97 times the shares offered to them.

Conspicuously, retail individual investors bid for just a little more than one tenth (0.12) the number of shares offered to them and employees bid for 55% of the shares reserved for them. Mutual funds completely avoided the share sale.

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AEL shares rose 3.35% on the BSE on Tuesday to close at ₹2,975 apiece.