The Abu Dhabi based conglomerate, International Holding Company (IHC), on Monday announced that it will be investing 1.4 billion dirhams ($381.17 million) in Adani Enterprises' follow-on public offer (FPO), news agency Reuters reported.
The announcement comes at a time when Adani Enterprises, owned by Asia's richest man, Gautam Adani, has suffered major losses in its companies' market value.
Despite the recent market turbulence, IHC remains confident in the fundamentals of Adani Enterprises, as reflected by its CEO, Syed Basar Shueb, who stated, "Our interest in Adani Group is driven by our confidence and belief in the fundamentals of Adani Enterprises Ltd; we see a strong potential for growth from a long-term perspective and added value to our shareholders," IHC CEO Syed Basar Shueb said in a statement."
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IHC, which is Abu Dhabi's largest listed company, has already invested $2 billion in Adani Group companies last year, including Adani Enterprises. However, this investment comes at a time when Adani Group is facing criticism from Hindenburg Research, who recently published a report flagging concerns about the company's debt levels and the use of tax havens.
Adani Group has refuted the claims, stating that they comply with all local laws and have made all necessary regulatory disclosures. The company's response to Hindenburg's criticisms will be put to the test this week, as Adani Enterprises' $2.5 billion follow-on share offering closes on Tuesday.
Shueb sees the advantage of the follow-on offer as a historical reference for the company's earnings report, management practices, and business practices, all of which provide valuable data for investors to consider before making an investment decision.
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"The advantage of the FPO (follow-on offer) is the historical reference for the company's earnings report, company's management, business practices, and much data to bank on before making any investment decision," Shueb said in a statement. Interestingly, the statement did not mention the Hindenburg report or its impact.
IHC spokesman Ahmad Ibrahim stated that the company does not comment on the activities of other businesses, in line with the company's policy. Shueb, however, indicated that the company will continue to explore new prospects in the international market and boost its global acquisitions by 70% this year, with a focus on the clean energy and food processing sectors.
The Abu Dhabi conglomerate is headed by Sheikh Tahnoun bin Zayed Al Nahyan, who serves as