Adani Ent FPO off to a shaky start

The Rs 20,000 crore follow-on public offering (FPO) of Adani Enterprises got off to a shaky  start on Friday, with investors bidding for 470,160 shares against 45.5 million shares on offer, data from BSE as of 5 pm showed. This means an effective subscription of 1%.  

The quota for non-institutional and retail investors was subscribed 0.01x and 0.02x times the shares on offer, respectively. The quota reserved for employees was subscribed 0.04 times, while the portion for qualified institutional buyers did not get a response.

On Friday, AEL shares slid 18.5% to Rs 2,762 on the BSE, below the floor price of Rs 3,112 fixed for the FPO. 

The stock now is available at an 11-15.5% discount to the FPO price band of Rs 3,112-3,276 a share. The issue closes January 31.

The anchor book for the FPO was oversubscribed on Wednesday, with the company finalising allocation of 18.26 million FPO equity shares to 33 investors, aggregating about Rs 6,000 crore.

Foreign institutional investors included the likes of Abu Dhabi Investment Authority, Maybank Asia, Goldman Sachs, Nomura, Societe Generale, Jupiter, BNP Paribas, Al Mehwar, Citigroup and Morgan Stanley.

Domestic investors such as SBI Employee Pension Fund, HDFC Life, Life Insurance Corporation of India and SBI Life were also a part of the anchor book. No mutual fund participated.

The anchor shares were priced at the higher end of the price band at Rs 3,276 per share.