In the latest offering for investors from the Adani stable, the flagship Adani Enterprises Limited has filed red herring prospectus with the markets regulator SEBI on Wednesday for the ₹20,000-crore follow-on public offer (FPO), largest for Indian markets in recent memory.

The company has fixed the floor price for the FPO equity share at ₹3,112 per share, 13 per cent discount from Wednesday’s closing of ₹3,584.9 on NSE. The cap price is fixed at ₹3,276 with minimum bid lot size of four shares and in multiple thereof for all categories of investors. The FPO, a fresh issue of equity shares aggregating upto ₹20,000 crore on a partly-paid basis, will open for subscription from January 27 to 30. The anchor investors can place bids on January 25, 2023.

According to market insiders, the FPO will provide the opportunity to retail investors who may look to gain from the recent rally observed in Adani stocks. The company has offered discount of ₹64 per share for retail individual investors.

The company proposes to utilise the net proceeds to fund capital expenditure requirements for projects under its subsidiaries and repayment of borrowings. Out of the total proceeds, ₹10,869 crore will be utilised for funding capital expenditure requirements of some subsidiaries. These include certain projects of the green hydrogen ecosystem, improvement works of existing airport facilities; and construction of greenfield expressway. And ₹4,165 crore will go for “repayment, in full or part, of certain borrowings of our company and three of our subsidiaries, namely, Adani Airport Holdings Limited, Adani Road Transport Limited, and Mundra Solar Limited,” the regulatory filing said.

The AEL Board of Directors approved fund raising of upto ₹20,000 crore through an FPO in November 2022. The company plans to dilute 3.5 per cent stake through the FPO. Currently, the promoter group holds 72.63 per cent stake in the company, institutions hold 20.92 per cent and non-institutional holding is at 6.45 per cent.

The issue has 10 lead managers, including ICICI Securities, Jefferies India, SBI Capital Markets, Axis Capital, BOB Capital Markets, IDBI Capital Markets JM Financial, IIFL Securities, Monarch Networth and Elara Capital. The Registrar to the offer is Link Intime India.

In last year, Adani Enterprises outperformed the benchmark indices as the stock almost doubled from ₹1,828 in January 2022 to ₹3,584.9 on Wednesday. Nifty50 index on the other hand witnessed much volatility during the year but stayed flat after a year from 17,617 levels in January 2022 to 18,165 on Wednesday.

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