EXCLUSIVE: India’s Adani says $2.5bn stake sale on track, despite bankers shake-up

MUMBAI, Jan 28 (Reuters) – $2.5 billion stake sale by India’s Adani Enterprises! (ADEL.NS) The planned issue price is planned, the company told Reuters on Saturday, while bankers are considering changes due to the market way in the group’s shares, the sources said.

Three people familiar with the matter told Reuters on Saturday that bankers in the deal were considering extending the sale or lowering the issue price, after Adani’s shares fell following the US short seller’s report.

In a statement, the Adani Group said, “There is no change in schedule or issue price.”

“All our stakeholders, including bankers and investors, have full confidence in the FPO (follow on public offer). We are very confident about the success of the FPO,” it said.

The group’s seven listed companies, controlled by one of the world’s richest men, Gautam Adani, have lost $48 billion in total market value since Hindenburg Research on Tuesday issued concerns about debt levels and the use of tax havens.

The Adani Group has called the report baseless and is considering taking action against Hindenburg.

Among the options bankers are considering is extending Tuesday’s subscription deadline by four days, sources said.

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

On the first day of retail auctions on Friday, the publication attracted 1% of its target number of subscribers, raising concerns about whether it could continue.

Investors, mostly retailers, bid for about 470,160 of the 45.5 million shares on offer, stock market data showed.

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

Another option being considered by bankers is to cut rates, sources said, suggesting it could be reduced by as much as 10%.

Adani had a floor price of 3,112 rupees ($38.22) and a ceiling of 3,276 rupees a share – at 2,761.45 rupees on Friday.

A decision is expected on Monday, the sources said.

“Revision in price band or extension of period of public issue can technically be done through a newspaper advertisement and an additional offer,” said Sumit Aggarwal, managing partner of Regstreet Legal Advisors and former official of the Capital Markets Regulator of India.

The sale was managed by Jefferies, India’s SBI Capital Markets and ICICI Securities. They did not immediately respond to requests for comment.

The Hindenburg report questioned how the Adani Group used companies in offshore tax havens like Mauritius and Caribbean islands.

It said it had “substantial debt” to key listed Adani companies, which put the entire group in a “secure financial position”.

Sriram Mani and Jayshree B Upadhyay report; Editing by Aditya Kalra, William Mallard and Jason Neely

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