Indian tycoons Jindal, Mittal buy Adani shares

At least two of India’s biggest business families participated in Adani Enterprises’ $2.5bn share sale, according to people familiar with the matter, in a sign of solidarity with Gautam Adani as the tycoon fights short-seller allegations that sent the value of his empire plummeting.

Tycoons Sajjan Jindal and Sunil Mittal subscribed to the follow-on offering in a lastminute push that helped Adani’s flagship firm complete the sale on Tuesday, said the people, who asked not to be identified as the information was not public.

The investments come from their personal funds and do not involve listed businesses that they helm such as JSW Steel and Bharti Airtel, the people said.

Jindal has invested about $30m, said one of the people. It is unclear how much Mittal brought in. Representatives for Jindal’s JSW and Mittal’s Bharti declined to comment on the founders’ possible investments in Adani share sale.

Adani Group representatives did not offer any immediate comment. Indian newspaper Business Standard reported Jindal and Mittal’s participation.

The offering was India’s largest follow-on share sale, and was fully subscribed on the final day, aided by a surge in demand from institutional investors and high net-worth individuals. Interest from retail investors — who billionaire Adani was hoping to attract to diversify the firm’s investor base — was notably weak.

WEB OF FIRMS

The participation by some of India’s biggest corporate names, some with potentially rival business interests, comes as the Hindenburg Research allegations against Adani are seen by some domestically as threatening the country’s economy.

Hindenburg alleged the Adani group used a web of firms in tax havens to inflate revenue and stock prices. The Adani group labelled the short seller’s allegations an “attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.”

The ports-to-power conglomerate, which has been on a breakneck expansion and diversification spree, has lost more than about $70bn in its market value since Hindenburg published the report last week.

The sell-off pushed Adani Enterprises’ stock below the follow-on offer’s floor price.

The share sale was then bolstered by existing Adani shareholder Abu Dhabi’s International Holding Co, which invested $400m in the offering.

The Adani Group has called Hindenburg’s report “bogus,” threatened legal action and said it was “a calculated securities fraud” on Sunday in a 413-page rebuttal, which the short seller said ignored all its key allegations and was “obfuscated by nationalism”.

THE ADANI GROUP LABELLED HINDENBURG RESEARCH’S ALLEGATIONS AN ‘ATTACK ON INDIA’