Adani Group said in a statement that in view of the unprecedented situation and current market volatility, the company aims to protect the interest of its investment community by returning FPO proceeds and taking back completed transactions. file | Photo Credit: Reuters
similarly stock fell With flagship Adani Enterprises plunging 28%, Ahmedabad-based Adani Group on Wednesday, February 1, 2023 night, in a rare move amid the growing impact of the Hindenburg Report alleging “stock manipulation and accounting fraud” by ₹20,000. Decided to call the FPO worth Rs. ,
follow-on public offer (FPO) got fully subscribed on the last day of subscription on Tuesday with the help of some big Indian groups, according to market sources.
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In a statement, Adani Enterprises said: “Given the unprecedented situation and current market volatility, the company aims to protect the interest of its investment community by returning FPO proceeds and rolling back completed transactions.”
Gautam Adani, Chairman, Adani Enterprises Limited, said, “The Board takes this opportunity to thank all investors for your support and commitment to our FPO.”
“The market today has been unprecedented, and our share price has fluctuated during the day. In view of these extraordinary circumstances, the Board of the Company has decided not to proceed with the FPO. We will keep the proceeds received by us in escrow and also to release the amounts blocked in your bank accounts for subscribing to this issue,” Mr Adani said.
The board’s announcement came hours after the market regulator apparently launched a full-scale probe into the allegations made in a report by US-based short seller Hindenburg Research.
According to Reuters, Sebi is probing any suspected violations in the FPO and is reportedly probing allegations that Adani entities failed to declare related party transactions as required and siphoned off vast amounts of offshore entities based in tax havens. The network was used, a charge dismissed by the Adani group.
During the day on Wednesday, 10 listed firms of the Adani group saw massive losses as the stocks fell between 3 and 28% on reports deepening the crisis.
After the debacle of its shares on Wednesday, it appears that the beleaguered conglomerate is heading towards a bigger crisis of confidence as global brokerage firm Credit Suisse has now put Adani Ports and SEZ, Adani Zero loan value has been set. Green Energy and Adani Electricity Mumbai.
In just five trading sessions since US short seller Hindenburg Research published its investigative report alleging accounting fraud and stock manipulation by the Gujarat-based Adani group, its shares in 10 listed firms have seen huge losses.
The combined market value of the group’s shares has plummeted by over 35% in just five trading sessions, wiping out nearly ₹7.4 lakh crore from the combined market capitalization of the group.
“There is no end in sight to the crisis as of now,” a top Mumbai-based stockbroker told The Hindu.
On Wednesday, its cement stocks saw a decline with ACC falling 6.2% and Ambuja Cement 16.7%, while the stock of recently acquired NDTV declined nearly 5%. The group had last year acquired ACC and Ambuja from Holcim Group of Switzerland.
Even as the group’s shares came under pressure following a damaging report from Hindenburg, so far there has been no statement from the Indian government or market regulator SEBI regarding allegations of corporate governance issues in the group.
However, on 26 January the Adani Group in a strong rebuttal dismissed all the allegations and instead described the US-based short seller’s report as a “planned attack on India” and its “judiciary and regulatory framework”.
Meanwhile, after a spurt in shares of its listed firms; Gautam Adani lost the title as Asia’s richest person to rival billionaire Mukesh Ambani, according to the Bloomberg Billionaires Index.
Mr Adani, who was ranked third in the list of billionaires till the last week of January, has now slipped to the 15th spot on Wednesday as his group’s shares declined following the Hindenburg report.