Adani Enterprises Ltd has cancelled its planned stock sale worth ₹20,000 crore after it received enough investment. The company explained in a statement that it made this decision due to changes in the stock market and will give the money back to the investors.
This type of stock sale, called a follow-on public offer, is normally done by companies that are already listed to spread out their ownership among different shareholders.
Adani Enterprises, the company, announced that they have cancelled their planned stock sale worth ₹20,000 crore. The company’s chairman, Gautam Adani, stated in a statement that the reason for this decision was due to the unstable stock market.
The chairman emphasized that protecting the investors was the top priority and that it wouldn’t be fair to continue with the sale under these circumstances.
Despite successfully closing the stock sale yesterday, Adani expressed gratitude towards the investors for their support and trust in the company.
Unfortunately, the company’s stock price has plummeted, with a 28% drop in Adani Enterprises and a 19% drop in Adani Ports and Special Economic Zone, making it the worst day for both companies on record.
Adani Enterprises is working with its financial managers to return the money collected from the cancelled stock sale and to release the funds that were blocked in the investors’ bank accounts. The decrease in the company’s stock price was caused by a report from Hindenburg Research that accused Adani Group of misusing offshore tax havens and influencing stock prices.
Adani Group denies these accusations, saying that the report has no evidence and lacks understanding of the law. They claim to have always followed proper regulations. Despite a successful 112% subscription rate, with the help of high net worth individuals on the final bidding day, the overall response from retail investors was not strong.
Our balance sheet is very healthy with strong cashflows and secure assets, and 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.– Gautam Adani