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Adani Enterprises calls off its FPO, to return money to investors | Mint – Mint

The Adani Enterprises on 1 February announced that its board has decided not to go-ahead with the fully subscribed Follow-on Public Offer (FPO).

The company aims to protect the interest of its investing community by returning the FPO proceeds and withdraws the completed transaction, it said in a stock regulatory filing.

The following action by the firm has been taken citing the rout in the shares of Adani Group companies.

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“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. Thank you,” said Adani Enterprises Ltd Chairman Gautam Adani.

“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,” Adani added. 

The multi-billionaire said said that his firm is working with our Book Running Lead Managers (BRLMs) to refund the proceeds received by us in escrow and to also release the amounts blocked in your bank accounts for subscription to this issue.

The firm also added that the balance sheet is very healthy with strong cashflows and secure assets, and they have an impeccable track record of servicing our debt. This decision will not have any impact on our existing operations and future plans.

Meanwhile, markets regulator SEBI is examining the rout and looking into any possible irregularities in the recent share sale by its flagship company, reported Reuters.

SEBI is also examining allegations made in a report by U.S. short-seller Hindenburg Research that Adani companies did not declare related party transactions as required, the report added.

After the January 24 report from U.S.-based Hindenburg Research, that flagged concerns about high debt levels and the use of tax havens, Adani’s shares have tumbled.

Apart from SEBI, rating agency Moody’s unit ICRA has said it was monitoring the impact of recent developments on its rated portfolio in Adani Group. As per details, Adani Enterprises lost $86 billion since last week after Hindenburg Research accused the group of using tax havens and flagged concerns on high debt levels. Adani Group has denied the allegations.

The five-day rout has now wiped out around $92 billion of the value of the conglomerate’s listed units, Bloomberg News said, while Adani’s fortune has collapsed by more than $40 billion.

With agency inputs. 

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