Indian tycoons have bought Adani shares amid the struggle for short sellers

(Bloomberg) — At least two of India’s largest business families participated in the $2.5 billion stock sale of Adani Enterprises Ltd., according to people familiar with the matter, in solidarity with Gautam Adani while the tycoon battles allegations of short sellers who plummeted the value of his empire.

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Tycoons Sajjan Jindal and Sunil Mittal underwrote the next offer in a last-minute push that helped Adani’s flagship company complete the sale on Tuesday, the people said, who asked not to be identified as the information they are not public.

The investments come from their personal funds and do not involve publicly traded companies they lead such as JSW Steel Ltd. and Bharti Airtel Ltd., the people said. Jindal has invested about $30 million, according to one of the people known. It is unclear how much Mittal bought.

Representatives of Jindal’s JSW and Mittal’s Bharti declined to comment on the founders’ possible investments in the sale of Adani shares. Representatives from Adani Group did not offer any immediate comment. The Indian newspaper Business Standard reported the participation of Jindal and Mittal.

The offering was India’s largest subsequent share sale and was fully subscribed on the final day, aided by increased demand from institutional and high-net-worth private investors. Interest from retail investors — which billionaire Adani hoped to attract to diversify the company’s investor base — was noticeably weak.

Short seller attack shows risks of going global for Adani Empire

The participation of some of India’s biggest corporate names, some with potentially rival business interests, comes as Hindenburg Research’s allegations against Adani are seen by some nationwide as a threat to the country’s economy at large.

Attack on India

Hindenburg said the Adani Group used a network of firms in tax havens to inflate revenue and share prices. The Adani Group labeled the short seller’s allegations an “attack on India, on the independence, integrity and quality of Indian institutions and on India’s history of growth and ambition.”

The port-to-power conglomerate, which has undergone mad expansion and diversification, has lost more than about $70 billion of its market value since the Hindenburg released its report last week. The sell-off pushed Adani Enterprises shares below the next offering price floor. The sale of the shares was then backed by Adani’s current shareholder Abu Dhabi’s International Holding Co., which invested $400 million in the offering.

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

–With the assistance of Saikat Das.

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