New DelhiAdani Enterprises on Wednesday said it has decided to withdraw its fully subscribed Rs 20,000 crore follow-on public offer (FPO) and the amount will be returned to investors. The announcement comes a day after the company’s FPO was fully subscribed on the last day of the offering on Tuesday.
“The Board of Adani Enterprises Limited, (AEL) has decided not to proceed with the fully subscribed FPO. In view of the unprecedented situation and current market volatility, the company aims to return the FPO proceeds to its investment community interests have to be protected and withdrawn.” Transaction complete,” the Adani Group flagship company said in a statement.
Against the offer of 4.55 crore, 4.62 crore shares were called for.
Non-institutional investors placed bids for more than three times the 96.16 lakh shares reserved for them, while the 1.28 crore shares reserved for qualified institutional buyers (QIBs) were almost fully subscribed, according to BSE data.
However, there was a muted response from retail investors and company employees.
Adani Enterprises Ltd Chairman Gautam Adani said, “Subscription for the FPO successfully closed on Tuesday. Despite the volatility in the stock last week, your faith in the company, its business and its management has been extremely reassuring and humble . Thank you”.
“However, today the market has been phenomenal, and the company’s share price has fluctuated during the day.”
“In view of these extraordinary circumstances, the Board of the Company felt that it would not be ethically correct to proceed with the issue. The interest of the investors is paramount and therefore in order to save them from any possible financial loss, the Board has decided not to proceed has decided.” FPOs,” Adani said.
The company said it is working with its Book Running Lead Managers (BRLMs) to return the proceeds held in escrow and also release the amount blocked in the bank accounts of investors for subscribing to the issue.
The company also said that its balance sheet is very healthy with strong cash flows and secured assets, and an “impeccable track record of servicing our debt”.
“This decision will have no impact on our current operations and future plans. We will continue to focus on long-term value creation and growth will be managed by internal resources. Once the market stabilises, we will look to deploy our capital market Will review strategy. Statement noted.
Shares of Adani group firms declined on Wednesday and lost over Rs 7 lakh crore of their combined market capitalization in the last five trading sessions amid concerns over a report by US-based short seller Hindenburg Research.
The decline is about 38 per cent compared to the market valuation at the end of trading on January 24, the day the report was released.
Shares of Adani Group have come under pressure on the stock markets after the Hindenburg report accused the Gautam Adani-led group of several allegations including fraudulent transactions and manipulation of share prices.
The Adani Group has dismissed the allegations as false, adding that it complies with all laws and disclosure requirements. It dismissed Hindenburg’s report as baseless and threatened to sue the New York short seller.