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Adani Enterprises calls off Rs 20,000 crore share sale, to refund money to investors

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The Company's board felt that going ahead with the issue will not be morally correct, Adani Enterprises said in a statement.

New Delhi, Feb 01: Adani Enterprises on Wednesday called off its Rs 20,000 crore share sale due to prevailing market conditions, the company said in a statement. It comes days after the company's stocks took a beating following criticism by American short seller Hindenburg Research.

"The Board of Directors of the Company at its meeting held today i.e. February 1, 2023 has decided, in the interest of its subscribers, not to proceed with the further public offer (FPO) of equity shares aggregating up to Rs 20,000 crore of face value Rs 1 each on partly paid-up basis, which was fully subscribed," the company said in an exchange filing.

Adani Enterprises calls of Rs 20,000 crore share sale, to refund money to investors

The Board of Adani Enterprises took the decision not to go-ahead with the fully subscribed Follow-on Public Offer (FPO) given the unprecedented situation and the current market volatility. The company said that it aims to protect the interest of its investing community by returning the FPO proceeds and withdraws the completed transaction.

"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," Gautam Adani, Chairman, Adani Enterprises, said in the press release.

He continued, "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."

Adani stated that the company is working with its Book Running Lead Managers (BRLMs) to refund by them 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," he concluded.

Meanwhile, the shares of Adani Group firms slumped on Wednesday and lost over Rs 7 lakh crore of their combined market capitalisation in the last five trading sessions amid concerns over US-based short seller Hindenburg Research's report. The decline is about 38 per cent compared to the market valuation at the end of trading on January 24, the day when the report was released, according to a PTI report.

Adani Group stocks have taken a beating on the bourses after Hindenburg in the report made a litany of allegations, including fraudulent transactions and share price manipulation, at the Gautam Adani-led group, the report added.

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