Fully subscribed Adani Enterprises FPO; NII part booked 3.36 times

Adani Enterprises' follow-on public offer (FPO) has been fully subscribed on the third and last day even after the Hindenburg report. The Rs 20,000 crore FPO of Adani Group's flagship company Adani Enterprises was subscribed 1.12 times on the last day. On the third day, against the total offer size of 4,55,06,791 shares, bids were received for 5,00,84,096 shares.
The quota reserved for Qualified Institutional Bidders (QIBs) was booked 1.26 times. While non-institutional investors got 3.32 times the subscription. 55% of bids have been received for employee quota. Whereas, 12% of bids were received for the quota reserved for retail investors.
According to the data from the exchanges, FPOs got only 3% of subscriptions on the second day on Monday and only 1% on the first day. The price band of the offer was kept at Rs 3,112-3,276 per share. Retail bids were expected to be low as the share price is trading below the FPO price band. However, a discount of Rs 64 per share was also given to retail investors in the FPO.
On Tuesday, Adani Enterprises shares closed at Rs 2,948, up Rs 55.15, or 1.91%. The shares received under the FPO will be credited to the Demat account by February 7. These shares will be available for trade from February 8. This FPO was open for subscription on 27 January.
The shares received under the FPO will be credited to the Demat account by February 7. These shares will be available for trade from February 8. The minimum bid lot size in the FPO was placed at 4 shares and in multiples of 4 shares thereafter. The company had issued fresh shares on a partially paid basis under a 100% book-built offer.
FPO i.e. Follow-on Public Offer is a process in which a company already listed on the stock exchange issues new shares to existing shareholders or new investors. This is different from an IPO where the company issues its shares for the first time to raise funds. Through FPO the company expands its equity base.
The price of shares issued in FPO is less than the market price. The primary motive behind issuing shares at a low price is to attract more customers for its issue. However, due to the low price of the shares in the subscription, often the market price also comes down and reaches closer to the FPO price.