New Delhi: Adani Enterprises on Wednesday said that it has decided not to go ahead with its Rs 20,000 crore Follow-on Public Offer (FPO) and will return the proceeds to investors.
"The Board of Adani Enterprises Ltd decided not to go ahead with the fully subscribed FPO. Given the unprecedented situation and the current market volatility, the company aims to protect the interest of its investing community by returning the FPO proceeds and withdraws the completed transaction," the company said in a statement.
"Today the market has been unprecedented, and the company's 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," said Gautam Adani, Chairman, Adani Enterprises.
The company said that it is working with book running lead managers to refund the proceeds received in its escrow accounts and also working towards releasing the amounts blocked in investors' bank accounts for subscription to this issue. Adani also said that the company's balance sheet is very healthy with strong cash flow and secure assets and has an impeccable track record of servicing its 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 stabilises, we will review our capital market strategy," the statement said.
Meanwhile, shares of Adani Group firms slumped on Wednesday and have lost more than Rupees seven lakh crore of their combined market capitalisation in the last five trading sessions amid concerns over US-based short seller Hindenburg Research's report. The decline is about 38 percent compared to the market valuation at the end of trading on January 24, the day the report was released.
Moreover, Adani Enterprises nosedived 28.45 percent to settle at Rs 2,128.70 on the exchange.