Adani Enterprises FPO: Group CFO says significant participation likely from institutional, strategic investors

Adani Group CFO Jugeshinder Singh says he is confident the Rs 20,000 crore follow on public offer (FPO) by Adani Enterprises will sail through and that his group is not looking to make any changes with respect to either price band or offer period. In an exclusive interview to Siddharth Zarabi, Managing Editor, Business Today Television, Singh said the FPO will proceed as planned.

Singh said his group chose the fund raising mechanism carefully. He said the FPO mechanism gave Adani Enterprises the flexibility to fill the book based on the total subscription, which now will be led majorly by institutional and long-term strategic book. Singh was asked on what happens to the FPO’s retail portion after a sharp selloff on Friday dragged prices of Adani Enterprises below the lower end of the price band of Rs 3,112.

Singh said Adani Enterprises is not a normal corporate that trades on valuation parameters such as earnings multiples. “It is an incubator. Its value comes from what it incubates. Adani Enterprises incubates airports, ports, green hydrogen, data centres, Adani Wilmar, Adani Digital Labs and Adani mining businesses. They are core businesses. Those businesses are the ones that have value. Adani Enterprises is the way to access that value. What people are interested is in getting the number of shares they can get in Adani Enterprises. The value will occur when we demerge the businesses and investors end up owning the similar number of shares based on ratios," Singh said.

The share price, said Singh, has massive sensitivity to retail investors. But for long-term institutional, long-term strategic investors and non-family offices, while there could be a volatility issue, it does not change the value of Adani Enterprises for them.

Singh said a total of 40 lakh retail applications were received for the FPO thus far. In normal circumstance, the FPO would have received strong retail response. The FPO can be filled from any category, he added. Singh said as his company has come out with its response, investors surely would read it and make decision. As of now, institutional and long-term strategic investors will be key subscribers to the issue, Singh said.

Meanwhile, Singh said the announced FPO's status stays the same.

Singh said that the index provider MSCI was yet to reach out to his group to seek response over the Hindenburg Research report.

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