Adani Enterprises announced on February 1 that its board of directors has decided not to proceed with the fully subscribed follow-on public offer (FPO).
According to a stock regulatory filing, the company intends to protect the interests of its investing community by returning the FPO proceeds and withdrawing the completed transaction.
The firm has taken the following action in response to the rout in the shares of Adani Group companies:
“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 have been extremely reassuring and humbling. “Thank you,” said Adani Enterprises Ltd. Chairman Gautam Adani.
“Given these extraordinary circumstances, the company’s board felt that going ahead with the issue would 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,” Adani added.
The multi-billionaire stated that his company is working with our Book Running Lead Managers (BRLMs) to repay the escrow revenues as well as the monies frozen in your bank accounts for subscription to this issue.
The business also stated that the balance sheet is highly solid, with robust cashflows and safe assets, and that they have an immaculate track record of debt servicing. This decision will have no effect on our current operations or future intentions.
Meanwhile, markets regulator SEBI is investigating the run and any suspected violations in its flagship company’s recent share sale, according to Reuters.
According to the article, SEBI is also looking into claims made in a report by US short-seller Hindenburg Research that Adani entities failed to register related-party transactions as required.
Adani’s shares have plummeted since the January 24 analysis by US-based Hindenburg Research, which raised worries about excessive debt levels and the use of tax havens.
Apart from SEBI, Moody’s affiliate ICRA stated that it was closely monitoring the effect of recent developments on its rated portfolio in Adani Group. According to reports, Adani Enterprises has lost $86 billion since last week, when Hindenburg Research accused the company of utilising tax havens and raised concerns about its high debt levels. The claims have been refuted by the Adani Group.
According to Bloomberg News, the five-day fall has already wiped off about $92 billion of the value of the conglomerate’s listed businesses, while Adani’s wealth has plummeted by more than $40 billion.