Gautam Adani’s $2.5 billion share sale was fully subscribed on Tuesday as investors pumped funds into his flagship Adani Enterprises Ltd (ADEL.NS) despite a scathing report by a short-seller that pummelled stocks in the Indian billionaire’s group.

The follow-on public offering (FPO) is critical for Adani, not just because it will help cut the group’s debt, but because its success will be seen as a mark of investor confidence as he faces one of his biggest business and reputational challenges of recent times.

SAURABH JAIN, ASSISTANT VICE-PRESIDENT, RESEARCH, SMC GLOBAL SECURITIES, NEW DELHI

“With the issue getting subscribed, I feel that it only shows that investors repose their faith and confidence in the Adani Group and that they do believe in its growth story. With the money coming in, the company will continue to be on a growth path, with the concerns left behind.”

“The subscription happening within the three-day period, in the backdrop of Hindenburg’s report, is quite noteworthy. The only tinge of disappointment is that retail subscription did not come through. That was their focus area considering the fact that there was a difference between the market price and the floor price of the FPO. It seems that retail investors did not consider the fact that there is more to rates than just the price.”

“Investors would view the successful completion of the FPO as a welcome relief as it implies that the company still has the support of institutional investors. The FPO would help to enlarge Adani Enterprises’ public float (thereby partly addressing the issue over the promoters’ concentrated shareholding), as well as reduce leverage for the company and improve investor sentiment for the wider group.

“That said, it would be helpful to know the identities of the subscribers, given concerns over investments by offshore shell companies.”

“It seems good that the fear which was overdone is finally settled. This should bring confidence back in the Adani group stocks and broader markets too.”

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