Adani's crucial share sale 85% subscribed as institutions pump in funds

The Adani Group plans to raise ₹20,000 crore via FPO; share sale needs at least 90% subscription to go through

Indian billionaire Gautam Adani's $2.5 billion share sale inched closer to full subscription on January 31 as investors pumped in funds after a tumultuous week for his group in which its stocks were pummeled by a scathing short-seller report.

The secondary share sale of flagship Adani Enterprises was subscribed 85% on Tuesday, including the anchor investor portion, Indian stock exchange data showed. The share sale needs at least 90% subscription to go through.

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By Monday, the book building process of the country's largest share sale had received only 3% in bids.

Adani Group's stocks have tumbled after the January 24 report from U.S.-based Hindenburg Research which flagged concerns about high debt levels and the use of tax havens, with cumulative losses now at $65 billion. Mr. Adani has called the report baseless.

The share sale is critical for Mr. Adani, not just because it is India's largest follow-on offering and will help cut debt, but also because its success will be seen as a stamp of confidence by investors at a time the tycoon faces one of his biggest business and reputational challenges of recent times.

The Group had in recent days repeatedly said investors were standing by its side and the share offering would go through, amid rising concerns that may not happen. Bankers at one point had considered tweaking the pricing of the issue, or extending the sale, Reuters had reported.