Hindenburg report: Price, timeline of Adani’s $2.5 billion FPO may change

Sources told Reuters on Saturday that among the options bankers are considering is to extend Tuesday’s deadline for subscription to the issue by four days.

Seven listed companies from a group controlled by one of the world’s richest men, Gautam AdaniA combined $48 billion in market value has been lost since then. Hindenburg The research on Tuesday flagged concerns about debt levels and the use of tax havens.

The Adani group has called the report baseless and said it is considering taking action against Hindenburg.

Shares of group flagship Adani Enterprises plunged 20% on Friday, dragging it 11% below the minimum offer price of the secondary sale. The issue was subscribed around 1% on Friday, the first day of retail bidding, raising concerns whether it would be able to go ahead.

A source said, “Everyone was shocked. They didn’t expect such a bad reaction.”

Adani Group .id did not immediately respond to requests for comment.

Adani had set a floor price of Rs 3,112 ($38.22) per share and a cap of Rs 3,276, but Adani Enterprises closed at Rs 2,761.45 on Friday.

Sources said the second option being considered is to reduce the price, with one saying it could be reduced by up to 10%.

Sources said a decision is expected on Monday.

“Revision of price band or extension of time of public issue can technically be done with a newspaper advertisement and issue of an addendum,” said Sumit Agarwal, managing partner, RegStreet Law Advisors and a former official at the capital markets regulator of India.

At the end of the first day of the share sale, investors, mostly retail, had bid for about 470,160 of the 45.5 million shares, according to data from the Indian stock exchange.

The sale is being managed by Jefferies, SBI Capital Markets of India and ICICI Securities. He did not immediately respond to requests for comment.

A fourth source said the Adani management is also discussing a share sale internally to decide on the next steps.

The Hindenburg Report has raised questions about how the Adani group used entities in offshore tax havens such as Mauritius and the Caribbean islands. It said major listed Adani companies had “substantial debt”, putting the entire group on a “precarious financial footing”.