Adani Share Sale Subscriptions Climb as Demand Jumps on Last Day

(Bloomberg) — Gautam Adani inched closer to completing his flagship company’s $2.5 billion share sale, a feat that could offer the billionaire some reprieve after his empire was rocked by allegations of fraud by short seller Hindenburg Research.

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Investors had placed orders for about 80% of the total shares on sale in the follow-on offering by Adani Enterprises Ltd. as of 1:57 p.m. in Mumbai on Tuesday, the final day of bidding, excluding the amount allotted to anchor investors. While the company’s shares were up about 4%, they continued to trade in the market for less than Adani is charging in the offering.

The stakes are high for Adani, who has already suffered one of the world’s biggest-ever declines in personal wealth. A successful deal would show he still has the ability to attract investors with bold expansion plans in industries ranging from green energy to ports and e-commerce. But failure to reach his target would represent a major blow to the tycoon’s prestige and heighten concerns about the conglomerate’s debt load.

The saga has also become a litmus test of India’s appeal to global investors, after the Hindenburg report put a spotlight on the country’s corporate governance and regulatory oversight. While the the follow-on offering was designed in part to broaden Adani’s base of shareholders, demand thus far from retail and institutional investors has been limited.

Among the most notable buyers is Abu Dhabi’s International Holding Co., which said Monday it will invest about $400 million. The funding from IHC, which is controlled by a key member of the emirate’s royal family, will represent about 16% of the offering and follows an almost $2 billion investment in Adani’s companies last year.

The subscription level of 80% compares with 3% as of Monday’s close. Retail investors bid for 9% of the shares on offer to them, while the company’s employees bid for 40% of the shares for their category. The non-institutional part that includes wealthy individuals, as well as the portion for qualified institutional investors were oversubscribed.

“Retail portion seems to be the only trouble at the moment,” said Sameer Kalra, founder of Target Investing in Mumbai. “If the FPO closes successfully, it will provide a breather to the group.”

Who Is Adani and What Are Hindenburg’s Allegations?: QuickTake

–With assistance from Ashutosh Joshi and Devidutta Tripathy.

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