- Date : 02/02/2023
- Read: 2 mins
Adani Enterprises to drop the fully subscribed FPO in the interest of investors.
Adani Enterprises aims to take care of its investors as they will return the proceeds from the Follow-on Public Offer and withdraws its completed transaction. The Company announced it is taking this step amidst the crashing Adani Enterprises shares. Gautam Adani-led Adani Enterprises released a statement thanking its investors for fully subscribing to the FPO and for showing belief and faith in the Company. It announced that it was humbled by all the support it received from its investors.
Returning The Proceeds
Gautam Adani said that the Board believed proceeding with the FPO would be morally wrong following the extraordinary circumstances. He said the investors' interest was paramount, and to save them from any potential losses, the Board decided to withdraw its FPO. He added that the Company would refund the money as it works with its Book Running Lead Managers (BRLMs). It received the proceeds in an escrow and will release the blocked amounts for the subscription, in the banks.
The firm has said its healthy balance sheet has secure assets and strong cashflows. It also has a great record of debt servicing. It added that the decision would not affect its future plans or current operations.
SEBI is meanwhile examining the crash and investigating any potential irregularities in the sale of shares through the flagship company. SEBI is also looking into Hindenburg's allegations about Adani not declaring the required third-party transactions. The allegations led to the tumbling of Adani's shares because of concerns related to tax haven use and high debt. ICRA, Moody's unit, is also monitoring the effect of the developments on its Adani portfolio.
Reports suggest that Adani lost a massive $86 billion after last week's allegations. However, Adani Group has called the allegations false and denied any wrongdoing. The crash has led to a $92 billion loss in the Company's value. Adani's net worth has decreased by over $40 billion.