UAE’s IHC backs Adani FPO with $400m check

IHC said in a statement that it subscribed for 16 percent of Adani Enterprises’ follow-on public offering (FPO) through its subsidiary Green Transmission Investment Holding RSC Ltd. The statement came as several Adani Group shares fell for the third straight day.

Including anchor investors and IHC bids, the overall demand for this offer is ¥As of the next day, it was 96.08 billion, and the book size was ¥19,861 million, still short ¥10,252.6 crore needs to be brought on the last day of the offer.

The IHC investment comes at a critical time, as Adani seeks to revive the product after US-based short-seller Hindenburg Research accused the group of accounting fraud and stock manipulation through a slew of shell companies in tax haven jurisdictions.

On Monday, Adani Enterprises shares rose 3.93% to ¥BSE 2,869.85, making up some of the losses.But the stock is still below the FPO price range ¥3,112 and ¥3,276.Retail investors will receive additional ¥A discount of 64 yuan per share.

“IHC’s bid will boost Wall Street’s confidence in the FPO. It will cover a significant portion of the institutional book and provide comfort to other institutional investors as well as HNI and retail investors,” said an investment banker, who declined to be named.

NSE data showed retail investors and the HNI category each subscribed 4 percent by the end of the second day.

In an interview on Sunday, Adani Group Chief Financial Officer Jugeshinder Singh expressed confidence in the group’s ability to successfully complete the share sale, although he acknowledged that the Hindenburg incident may dampen participation from retail and HNI investors. “We have information based on roadshows. We’re confident about it,” he said.

“We think that (retail and HNI) participation will be significantly lower. But once you have institutional participation, how retail investors behave and how high-net-worth individuals behave is another matter. From an FPO perspective, which category invests How much is not relevant. What matters is the total FPO that gets subscribed,” he added.

Prior to the FPO public subscription, the company raised ¥5,984.9 crore by selling shares to anchor investors at the following prices ¥3,276 pieces, the upper end of the price range.

Adani plans to allocate ¥FPO provides 108.69 billion capex for its subsidiaries’ green hydrogen projects and construction of existing airports and greenfield highways. also, ¥41.65 billion will be used to repay some or all of the debt of Adani Airport Holdings, Adani Road Transport and Mundra Solar.

This is not IHC’s first investment in Adani Group. Last year, IHC invested $2 billion in three Adani companies: Adani Enterprises, Adani Green and Adani Transmission.

“Our interest in Adani Group stems from our confidence and belief in the fundamentals of Adani Enterprises; we see strong potential for growth and added value for our shareholders over the long term,” said Syed IHC CEO Basar Shueb said.