Adani fundraising targets retail buyers, allows discount pricing

Bloomberg

Adani Enterprises Ltd, the flagship firm owned by Asia’s richest person Gautam Adani, chose a fundraising route for its $2.5 billion share sale that allows the group to woo retail investors through potentially discounted prices.
The 200 billion rupee ($2.5 billion) equity sale via the further public offer mechanism gives the company maximum flexibility, including pricing at a discount to target more investors, Chief Financial Officer Jugeshinder Singh said. After tapping strategic investors in recent years, Singh said the conglomerate was looking for a broader investor base that doesn’t mind a company investing in long-term projects which can take time to show returns.
“We have done strategic capital. The next capital is patient capital,” Singh said.
“Indian mom and pop investors invest for their children and grand children.”
The flexibility to price the share sale at a discount can make the offering more palatable for a stock that’s trading at hefty valuations. The fundraising is part of the billionaire’s broader attempts to drive down debt ratios, seek global legitimacy among investors and silence his naysayers. Concerns have grown that his breakneck expansion spree across media, cement and green energy has boosted leverage and financial complexity at the ports-to-power conglomerate.
The follow-on share offer “permits the company to broaden its investor base” since both new retail and institutional investors can participate, according to Sandip Bhagat, a Mumbai-based partner at S&R Associates.
This fundraising effort can also increase float and enhance visibility with the retail investors, said Manan Lahoty, a partner at IndusLaw in Mumbai.