Adani Group cancels FPO; says will return money to investors

Adani Enterprises stated on February 1 that it has cancelled its Follow-On Public Offering (FPO) amidst ongoing controversy after American short seller, Hindenburg Research, accused the company of round-tripping, using tax havens and flagged debt concerns in a report.

The Board of Directors of the Company at its meeting held on Wednesday, February 1, 2023, decided, in the interest of its subscribers, not to proceed with the further public offer (FPO) of equity shares aggregating up to ₹20,000 crore of face value ₹1 each on partly paid-up basis, which was fully subscribed.

“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," said Gautam Adani, Adani Group chairman, in a statement.

"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 in the statement, while assuring those who invested that they would "refund the proceeds received by us in escrow and to also release the amounts blocked in your bank accounts for subscription to this issue".

Adani claimed that its balance sheet was "very healthy with strong cashflows and secure assets". "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.”