Although Gautam Adani pulled back his firm's Rs 20,000 crore FPO which was fully subscribed, reports suggested that two of India's wealthiest families bid for its shares. But that didn't save the offer from getting shelved and it spooked investors even more, with Adani's losses surpassing $100 billion, which is 43 per cent of its market value. This has also driven away major players, as Citigroup has followed Credit Suisse to reject Adani securities as collateral for loans.
High-net worth peers failed to help
The Hindenburg report which has severely dented Adani's fortunes, had alleged that the Adani Group would use shell companies to spike share prices, and then pledge inflated stocks to borrow funds. These allegations came months after Adani's high debt had come into the spotlight, prompting him to raise money from the market by selling shares. But while NIIs that include ultra high net-worth families, and its existing investors such as Abu Dhabi's IHC invested in the FPO, common share buyers only subscribed to 12 per cent of their quota.
Firefighting efforts in vain?
Even as investors with deep pockets saved face for Adani when retail investors stayed away, the port to power conglomerate pulled back the FPO citing market volatility. The firm claims that it has answered 68 of 89 questions, and has even invoked nationalism to repel the bad press after Hindenburg's report, but none of that has been able to soften the blow.
