Adani Enterprises shares shoot up 4% as board mulls fundraising via stake sale

Adani Enterprises shares shoot up 4% as board mulls fundraising via stake sale

Share price of the embattled Adani Enterprises soared 4.3% to touch an intraday high of Rs 1975 as the company announced the board of directors will convene on 13 May to consider raising funds. The additional capital will be raised by way of issuance of equity shares or other eligible securities through a private placement, a qualified institutions placement or a preferential issue, the company said in a filing with the exchanges.

Adani Transmission and Adani Green Energy also announced similar plans. The exchange filings did not reveal the amount of capital that would be raised. 

Adani Enterprises share price movement

On 24 January, the day of the Hindenburg Research report being disseminated, the share price of Adani Enterprises settled at Rs 3,442 per equity share. However, as a result of the ensuing fallout, the share price touched a low of Rs 1,017.45, wiping off 70.4% of investors’ wealth in just six trading sessions. Having recovered some from the lows, Adani Enterprises shares are trading at Rs 1,951 as of 10.30 am, still about 43.3% lower than that prior to the impact of the report, and down about 53.4% from the 52 week high of Rs 4,190 per equity share.

Adani Enterprises FPO

Shortly after the Hindenburg Research report was released, Adani Enterprises chose to withdraw its Rs 20,000 crore-FPO. The step has been taken ‘in the interest of its subscribers,’ Adani Enterprises said in the official statement while withdrawing the FPO, which was fully subscribed.

About the Hindenburg Research report

On January 24, Hindenburg Research published a report named “Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History.” It accused Gautam Adani and his brothers of stock manipulation and running various shell companies abroad, taking a short position in Adani Group Companies through US-traded bonds and non-Indian-traded derivative instruments. The report further added that its 7 key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations. However, the conglomerate has denied all allegations.