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Adani calls off $2.5bn FPO after market setback

AHMEDABAD, February 1, 2023

Indian billionaire Gautam Adani's Adani Enterprises Ltd (AEL) has decided not to go-ahead with the fully subscribed $2.5 billion Follow-on Public Offer (FPO).
 
This follows the unprecedented hammering of Adani stocks at the Indian stock market after US-based short-seller Hindenburg accusing the Adani Group last week of using offshore tax havens and stock manipulation. 
 
It also raised concerns about its high debt and the valuations of the seven listed Adani companies.
 
"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," AEL said..
 
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 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."
 
Meanwhile, Reuters said India's market regulator is examining a rout in the shares of Adani's companies, as the losses triggered by the Hindenburg report ballooned on Wednesday to $86 billion.
 
The group has denied the allegations, saying the short-seller's narrative of stock manipulation has "no basis" and stems from an ignorance of Indian law. It has always made the necessary regulatory disclosures, it added.
 



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