Adani Enterprises FPO is off, cash to be returned to traders

The Board of Adani Enterprises Ltd (AEL) has determined to not go-ahead with the totally subscribed Follow-on Public Offer (FPO).

The firm stated in a launch that given the unprecedented state of affairs and the present market volatility, it “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 referred to the volatility within the inventory over the past week and stated the curiosity of the traders is paramount and to insulate them from any potential monetary losses, the Board has determined to not go forward with the FPO.

“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,” he stated.

“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,” he added.

Gautam Adani stated firm’s stability sheet may be very wholesome with robust cashflows and safe property.

“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,” he stated.

“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 added.

Shares of Adani Enterprises nosedived sharply on Wednesday, a day after its follow-on public provide closed for the subscription.

The shares of Adani Group flagship firm closed at Rs 2,179.75 with a pointy decline of 26.70 per cent. Its intraday low was Rs 1,941.2, over 30 per cent decrease than Tuesday’s settlement worth.

On Tuesday, the final day for subscription, the follow-on public provide (FPO) issued by Adani Enterprises was totally subscribed. A follow-on public providing (FPO) is the issuance of shares to traders by an organization listed on a inventory change after its preliminary public choices.

Data confirmed the demand for the FPO was led by non-institutional traders, and so they subscribed to the shares 3.26 occasions. The portion for institutional traders was additionally oversubscribed.

On Monday, an Abu Dhabi-based diversified conglomerate International Holding Company introduced that it’ll make investments about USD 400 million (AED 1.4 billion) into the Adani Enterprises’ follow-on public provide (FPO) via its subsidiary Green Transmission Investment Holding RSC Limited.

Adani Enterprises had filed a crimson herring prospectus with the markets regulator Securities and Exchange Board of India (SEBI) for the Rs 20,000 crore follow-on public provide (FPO), the biggest ever in India.

There have been considerations that the FPO might not obtain a robust response from traders amid a report by a US-based Hindenburg Research that surfaced on January 24, which claimed the Adani Group of getting weak enterprise fundamentals amongst others.

The US-based agency, in its report, raised considerations about shares of Adani group corporations having a risk of declining from their present ranges, owing to excessive valuations. In response, Adani Group on Sunday stated the latest report by Hindenburg Research was not an assault on any particular firm however a “calculated attack” on India, its development story, and ambitions. It added the report was “nothing but a lie”.

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