The company has set a price band of ₹3,112-3,276 for the ₹20,000 crore FPO.
Shares of Adani Enterprises closed at ₹3,584.90 on Wednesday, down 1.5% from their previous close. Bidders will have to pay 50% of the offer price initially and the balance in one or more tranches, Adani Enterprises said in a stock exchange filing.
Anchor investors will be allotted shares on 25 January, and for the rest, the offer will remain open from 27 to 31 January.
The FPO will increase the company’s free float. The promoter owns 72.63% of the company’s equity capital, while the public holds 27.37% shareholding for the quarter ended September 2022 shows. After the offer, promoter shareholding would decline by almost 5%, based on Wednesday’s market cap of ₹4.1 trillion.
The company’s partly paid shares under the FPO bring to memory Reliance Industries Ltd’s ₹53,000-crore-plus rights issue in 2021, which was payable in three tranches over 18 months.
Of the ₹20,000 crore being raised through the offer, ₹10,869 crore will go into the capital expenditure of its green hydrogen subsidiaries, existing airport facilities and to build a greenfield expressway.
₹4,165 crore will be used to repay debt in part or full of the company and three of its subsidiaries—Adani Airport Holdings Ltd, Adani Road Transport Ltd, and Mundra Solar Ltd, and the balance for general corporate purposes.
In September, billionaire Gautam Adani said his group would invest $100 billion over the next decade, primarily in energy transition and digital opportunities, as well as sectors such as aerospace and defence, metals and petrochemicals. Of this, 70% is earmarked for the energy transition space.
“It is our commitment to investing $70 billion in an integrated hydrogen-based value chain," Adani said.
Adani Enterprises’ revenue from operations tripled to ₹79,019 crore, and profit almost doubled to ₹901 crore in the first half of FY23 from the year-ago period.
“Given that it’s a large-cap index stock, the pricing is very attractive," said a person advising the company on the follow-on public offer.
Adani Enterprises entered the benchmark Nifty50 index in September 2022.
“It’s a good initiative as the FPO would entail an increase in capital and free float of the company," said Sudip Bandyopadhyay, chairman of Inditrade Capital. “The further discount to retail makes tremendous sense."
However, a senior official from a domestic institution said the company would have to show “explosive" growth to justify the valuation, which would hover around 300 P/E adjusted for the discount.
Investment banks ICICI Securities Ltd, Jefferies India Pvt. Ltd, SBI Capital Markets Ltd, Axis Capital Ltd, BOB Capital Markets Ltd, IDBI Capital Markets and Securities Ltd, JM Financial Ltd, IIFL Securities Ltd, Monarch Networth Capital Ltd and Elara Capital (India) Pvt. Ltd are managing the share sale.
