Adani Enterprises Ltd has called off the sale of Rs 20,000-crore shares, saying it would not be “morally correct” in the current “volatile” market conditions. Adani Enterprises chief Gautam Adani has said, although the FPO successfully closed yesterday, “the market was unprecedented (today) and our share price fluctuated throughout the day”.
“Given these extraordinary circumstances, the company’s board felt that proceeding with the matter would not be morally correct,” he said in a statement.
“The interests of the investors are paramount and in order to protect them from possible financial losses, the Board has decided not to proceed with the FPO,” he added.
He thanked the investors and said, “Despite the stock volatility over the past week, your belief in the company, operations and management has been extremely comforting and humbling”.
Shares of the Adani Group firms had fallen on concerns over a report by US-based short seller Hindenburg Research, which raised concerns about the group’s high debt and suspected misuse of tax havens. The report was released on January 24 – the day the Rs 20,000-crore follow-on share sale opened to anchor investors.
Adani Enterprises has rejected the allegations. In a statement on Sunday, it said the US company’s conduct “is nothing short of calculated securities fraud under applicable law.”
“This is not just an unfounded attack on a specific company, but a calculated attack on India, the independence, integrity and quality of Indian institutions, and India’s growth story and ambition,” the statement said.
“Hindenburg has not published this report for altruistic reasons, but purely out of selfish motives and in flagrant violation of applicable securities and foreign exchange laws,” the report said. “The report is neither ‘independent’, nor ‘objective’, nor ‘well researched’.”
The FPO has been subscribed to more than 1.25 times for institutional investors, say those familiar with the matter.
Shares of the flagship company, however, fell again on Wednesday for the fifth consecutive day of losses. Shares of Adani Enterprises fell 30 percent on the Bombay Stock Exchange minutes before the scheduled close.
In the statement, Mr Adani said their “balance sheet is very healthy with strong cash flows and safe assets, and we have an impeccable track record of servicing our debt”.
The decision to call off the sale of shares “will not affect our existing business and future plans,” he said.
“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 markets strategy. We are confident that we will continue to receive your support. Thank you for your trust in us,” he added in the statement.
Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.
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