Gautam Adani is enlisting several of India’s top tycoons to salvage a $2.4 billion stake sale of its conglomerate after fraud allegations from the seller threatened to torpedo the offering, according to people familiar with the matter.
Entities linked to Sajjan Jindal, the billionaire chairman of the JSW conglomerate, and Sunil Mittal, the head of Bharti Enterprises, are investing in Adani Enterprises’ share offering, the two said.
Other family offices that manage money for some of India’s richest business figures are also being approached as Adani Group tries to secure support for the deal, several people told the Financial Times.
“On Saturday, it was known in the community that they approached high-income families,” said one business figure who was contacted but did not invest. “I know he got money from the family office.”
One tycoon pledged a $60 million investment in a stock sale, people familiar with the situation said.
JSW and Bharti Enterprises declined to comment. Adani Group declined to comment.
Shares in all nine listed companies Adani Group sold on Wednesday in Mumbai despite the successful closing of the sale shows, which is a test of the market’s faith in the group after the allegations of Hindenburg Research, a US-based investor.
Hindenburg, who said he bet against the Adani Group through a short position in the investment, alleged that the Indian group has manipulated the share price and participated in accounting fraud. Adani vehemently denied the allegations, calling them malicious and discredited.
Most bids for the deal’s public tranche, which closed on Tuesday, came from non-institutional investors, with strong demand from wealthy Indians, according to brokers. Mutual funds did not participate in the sale, while retail investors bid for only 12 percent of the allotment.
Stock sales were boosted after Abu Dhabi’s International Holding Company on Monday said it would invest $400 million. Institutions including London-based Jupiter Asset Management have committed to buy about 30 percent of the total shares offered last week, before Hindenburg’s accusations.
Adani Group flagship business Adani Enterprises, which raised $2.4bn in extra equity, fell 10 per cent on Wednesday, as did Adani Total Gas, while Adani Green Energy fell 9.7 per cent.
The latest share price fall has caused Adani Group’s share market capitalization to drop by more than Rs6.5tn ($80bn) since Hindenburg released the brief report, which showed a fall of more than a third in just one week.
The Adani Group has grown over the past three years to become one of India’s largest industrial groups in infrastructure and logistics, making Gautam Adani one of the richest men in the world.