The board of Adani Enterprises on Wednesday decided not to go ahead with its fully subscribed follow-on public offer (FPO).
In a statement, Adani Enterprises said: “Given the unprecedented situation and the current market volatility the Company aims to protect the interest of its investing community by returning the FPO proceeds and withdraws the completed transaction.”
The extraordinary development has come amid a massive market rout in Adani Group stocks following the release of the Hindenburg Research report that accused the group of “brazen stock manipulation and accounting fraud”.
Gautam Adani said, “Today the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the Company’s Board has decided not to go ahead with the FPO. We are working to refund the proceeds received by us in escrow and to also release the amounts blocked in your bank accounts for subscription to this issue.”
Explained | Adani Group calls off FPO: What exactly has happened?
Shares of Adani Group firms have lost more than 7 lakh crore of their combined market capitalisation in the last five trading sessions after Hindenburg Research, a New York-based investor research firm that specialises in short selling, accused Adani’s companies of “brazen stock manipulation and accounting fraud scheme over the course of decades”.
Adani Group, on the other hand, has questioned Hindenburg’s credentials and the timing of the report, arguing that the report is not just an “unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India”.
Full text of the statement by Adani Group
The Board of Adani Enterprises Ltd., (AEL) decided not to go-ahead with the fully subscribed Follow-on Public Offer (FPO).
Given the unprecedented situation and the current market volatility the Company aims to protect the interest of its investing community by returning the FPO proceeds and withdraws the completed transaction.
Gautam Adani, Chairman, Adani Enterprises Ltd said, “The Board takes this opportunity to thank all the investors for your support and commitment to our FPO. The subscription for the FPO closed successfully yesterday. Despite the volatility in the stock over the last week, your faith and belief in the Company, its business and its management has been extremely reassuring and humbling. Thank you.
However, today the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the Company’s board felt that going ahead with the issue will not be morally correct. The interest of the investors is paramount and hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO.
We are working with our Book Running Lead Managers (BRLMs) to refund the proceeds received by us in escrow and to also release the amounts blocked in your bank accounts for subscription to this issue.
Our balance sheet is very healthy with strong cashflows and secure assets, and we have an impeccable track record of servicing our debt. This decision will not have any impact on our existing operations and future plans. We will continue to focus on long term value creation and growth will be managed by internal accruals. Once the market stabilizes, we will review our capital market strategy. We are very confident that we will continue to get your support. Thank you for your trust in Us.
