The Adani Group’s Rs 20,000 crore follow-on public offer (FPO) was in jeopardy after the Hindenburg report was released just prior to the IPO. As a result, not only did the shares fall by 30 per cent, but the offer which opened on January 25, only saw a three per cent subscription by January 30. Even after Adani’s reply to the Hindenburg report, investors appeared unconvinced. After Adani’s response to Hindenburg’s allegations, Hindenburg said the company had only confirmed its key points, while not clarifying on some of the important issues. However, Hindenburg is incentivised to criticise companies and managements, hence, reading too much into its opinions wouldn’t offer a balanced picture. The Adani Group refused to reduce the offer price for FPO. AN Abu Dhabi-based fund IHC said that it would be investing $ 400 million in the FPO. It appeared that the decision was correct since on the last day, the FPO was fully subscribed by investors. After the FPO was fully subscribed, the company said it would be wrong to accept investor money at a premium to the current stock price, and returned the money to investors. After the late-night announcement, the group’s shares fell further during the morning session on Thursday.
What Explains Adani Group’s U-Turn on the FPO?
What Explains Adani Group’s U-Turn on the…
What Explains Adani Group’s U-Turn on the FPO?
The Adani Group’s Rs 20,000 crore follow-on public offer (FPO) was in jeopardy after the Hindenburg report was released just prior to the IPO. As a result, not only did the shares fall by 30 per cent, but the offer which opened on January 25, only saw a three per cent subscription by January 30. Even after Adani’s reply to the Hindenburg report, investors appeared unconvinced. After Adani’s response to Hindenburg’s allegations, Hindenburg said the company had only confirmed its key points, while not clarifying on some of the important issues. However, Hindenburg is incentivised to criticise companies and managements, hence, reading too much into its opinions wouldn’t offer a balanced picture. The Adani Group refused to reduce the offer price for FPO. AN Abu Dhabi-based fund IHC said that it would be investing $ 400 million in the FPO. It appeared that the decision was correct since on the last day, the FPO was fully subscribed by investors. After the FPO was fully subscribed, the company said it would be wrong to accept investor money at a premium to the current stock price, and returned the money to investors. After the late-night announcement, the group’s shares fell further during the morning session on Thursday.