Adani Enterprises underperforms in run-up to FPO; slips 14% in last 1 month

Adani Enterprises is planning to launch its Rs 20,000-crore follow-on public offer (FPO) before the Union Budget on February 1

Shares of Adani Enterprises were nearly 2 per cent lower at Rs 3,577.50 on the BSE in Wednesday’s firm intra-day trade. In comparison, the S&P BSE Sensex was up 0.32 per cent at 60,847 at 10:29 AM.

In the past one month, the stock price of Adani Group’s flagship company has declined 14 per cent ahead of its follow-on public offer (FPO), through which it aims to raise up to Rs 20,000 crore.

The stock had hit a record high of Rs 4,189.55 on December 21, 2022. In comparison, the S&P BSE Sensex was down less than 1 per cent during the same period.

On November 25, 2022, the board of directors of Adani Enterprises approved the raising of funds by way of a further public offering through a fresh issue of equity shares by the company.

According to a Business Standard report, Adani Enterprises is planning to launch the FPO before the Union Budget on February 1, thanks to an encouraging response from global investors during the ongoing roadshows. CLICK HERE FOR FULL REPORT

Other media reports said that the company filed the papers for the FPO with stock exchanges on Monday. 

Adani Enterprises is one of India's largest business conglomerates. The company's business investments revolve around airport management, technology parks, roads, data centre and water infrastructure.

The company, being a flagship entity and incubator of Adani Group, extends financial assistance to various entities of Adani Group on need basis, in form of corporate guarantee/ revolving interest bearing inter corporate deposits/ loans/ advances.

In a similar manner, it may also seek financial assistance from other entities of Adani Group for business purposes. The financial assistance will be utilised by the borrowing entity(ies) for its business purposes including expansion, working capital requirements and other business purposes.

According to a report by Bloomberg, the fundraiser would help the group deleverage and provide support to the companies' dollar bonds. It is further expected to boost the group's debt ratios, stock liquidity and investor base.