Gautam Adani ‘s flagship is offering investors 10%-15% discounts in India’s largest follow-on share sale as the tycoon strives to entice a broader set of supporters.
According to an exchange filing Wednesday, Adani Enterprises Ltd. is looking to raise $2.5 billion by selling shares at a price range of $3,112 to $3,276 a share. According to Bloomberg News, institutional investors will receive a 10% discount on the current market price, while individual investors would pay even less to invest in a company that has nearly doubled in market value.
According to the prospectus filed earlier on Wednesday, almost half of the funds will go toward expanding Adani’s airport and renewable energy projects, while the remaining 42 billion rupees – a little less than a quarter of the total funded – will be used to reduce debt. Anchor investors may bid on January 25, with the remainder bidding from January 27 through January 31.
In an unprecedented move for a follow-up sale, Asia’s richest man will allow investors to pay in instalments. Bidders must pay 50% of the bid price up front, followed by one or two instalments of the remaining balance. Retail investors would receive a 64-rupee markdown per share.
Mr. Adani’s big share sale would help him achieve several objectives. Broadening his investor base would address allegations that his empire is primarily thinly traded stocks; repaying the debt would address concerns about overleveraged; and attracting mom-and-pop investors would cement Mr. Adani’s legacy as a wealth creator in a country where income inequality is growing.
Adani Enterprises’ stock has risen 95 percent in a year to 3,596.7. The stock is valued at more than 141 times its one-year forward earnings. According to Bloomberg data, Reliance Industries Ltd., India’s largest corporation by market value, is at over 20 times.
“We have invested in strategic capital. The following capital is patient capital “In a November interview, Chief Financial Officer Jugeshinder Singh stated. “Mom and pop investors in India invest for their children and grandchildren.”
