Abu Dhabi-based International Holding Company (IHC) on Thursday said it has been notified by Adani Enterprises that the Adani Group’s flagship firm has decided to call off its Rs 20,000-crore follow-on public offer.
IHC confirmed that its invested funds have been transferred back to its bank account. IHC on Monday said it has invested $400 million in the share sale of Adani Group’s flagship firm.
The investment in Adani Enterprises’ follow-on public offering (FPO) was made through its subsidiary Green Transmission Investment Holding RSC Limited, a company statement said.
Most Adani group shares have fallen in the past six trading sessions after Hindenburg Research released a damning report that flagged concerns around debt and the use of tax havens at the ports-to-energy conglomerate. OVer $100 billion in market value has been wiped out of the Adani empire in the last six trading sessions.
Hindenburg released its report on the day Rs 20,000 crore FPO of Adani Enterprise opened for subscription for anchor investors.
Adani Enterprises on Wednesday said it has decided not to go ahead with its FPO and will return the proceeds to investors.
The announcement comes a day after the company’s FPO was subscribed fully on the last day of the offer on Tuesday.
”The Board of Adani Enterprises Ltd., (AEL) 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.
As many as 4.62 crore shares were sought as against an offer of 4.55 crore.
Non-institutional investors put in bids for over three times the 96.16 lakh shares reserved for them, while the 1.28 crore shares reserved for qualified institutional buyers (QIBs) were almost fully subscribed, according to BSE data.
There was, however, a muted response from retail investors and company employees.
Billionaire Gautam Adani has said the decision to withdraw a fully subscribed share sale of the flagship firm of his group was primarily because of volatility in the market.
Adani Enterprises Ltd’s Rs 20,000 crore follow-on public offer managed to get investors on the last day of the share close on Tuesday. Late on Wednesday, the company decided to withdraw the FPO and refund the investors.
”After a fully subscribed FPO, yesterday’s decision of its withdrawal would have surprised many. But considering the volatility of the market seen yesterday, the board strongly felt that it would not be morally correct to proceed with the FPO,” Adani said in an address to investors on Thursday.
The decision, he said, will not have any impact on existing operations and future plans. ”We will continue to focus on timely execution and delivery of projects.” The fundamentals of the company are strong, Adani asserted.
”Our balance sheet is healthy and assets robust. Our EBITDA levels and cash flows have been very strong and we have an impeccable track record of fulfilling our debt obligations. We will continue to focus on long-term value creation and growth will be managed by internal accruals.” Adani said the group would review the capital market strategy once the market stabilises.
”We have a strong focus on ESG and every business of ours will continue to create value in a responsible way. The strongest validation of our governance principles comes from several international partnerships we have built across our different entities,” he added.