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Abu Dhabi fund snaps up shares in Adani’s secondary share offering

Crowd, Person, Audience Adani Group
The probe is part of Sebi's investigation into the Indian conglomerate which follows a January report by short-seller Hindenburg Research

Abu Dhabi Investment Authority (ADIA) and Maybank Securities picked up a stake in Adani Enterprises’ $2.45 billion secondary share offering on Wednesday, which coincided with a short-seller report that slammed the shares of Adani Group companies.

The anchor portion of the share sale, India’s largest follow-on public offering (FPO), was allocated to high-profile investors at 3,276 rupees per share, which was the top end of the price band set.

A source told Reuters earlier in the day that anchor investors bid for shares worth 90 billion rupees ($1.10 billion), compared to the 60 billion rupees reserved for them.

Adani Enterprises, the flagship firm of Adani Group, is looking to fund capital expenditure and pay off some debt from the proceeds of the share sale.

Maybank was allocated 34.09 percent of the 18.2 million shares reserved for institutional investors for 20.4 billion rupees, while ADIA got 2.56 percent worth 1.53 billion rupees.

Local insurance behemoth Life Insurance Corp of India was allocated shares worth nearly 3 billion rupees.

Adani Group did not immediately respond to a Reuters request for comment.

Bidding for retail investors will start on Friday and close on January 31. Adani Enterprises had last week set the floor price for the FPO at 3,112 rupees per share, with a price cap of 3,276 rupees.

The demand from anchor investors comes despite Hindenburg Research disclosing a short position in Adani Group, accusing it of improper use of offshore tax havens and flagging concerns about high debt that eroded $11 billion in investor wealth.

The group, led by Gautam Adani, the world’s third richest person according to Forbes, dismissed the claims of the US short seller as baseless, saying it was timed to damage its reputation ahead of a large share offering.

Shares of Adani Group companies closed between 1.5 percent and 8.9 percent lower on Wednesday.