Adani Group calls off FPO citing 'unprecedented situation', says will return proceeds

Days after the Adani Group's FPO was fully subscribed, the corporate giant, in an unprecedented development has decided to call off its FPO. 

"The Board of Adani Enterprises Ltd decided not to go ahead with the fully subscribed Follow-on Public Offer (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 complete transaction," Adani Enterprises said in a statement.

The conglomerate said that it is working with Book Running Lead Managers (BRLMs) to refund the proceeds received by it in escrow and to also release the amounts blocked in bank accounts for subscription to this issue.

Gautam Adani, Chairman of Adani Enterprise Ltd, thanked all the investors for their support and commitment to its FPO. "However, today the market has been unprecedented and our 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," he said in a statement.

Moreover, Adani stated that the company's balance sheet is very healthy with strong cashflows and secure assets. "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 stabilises, we will review our capital market strategy. We are very confident that we will continue to get your support."

Adani Group's Rs 20,000 crore share sale in its flagship firm had sailed through on the last day after investors rallied behind the business tycoon.

While the portion of a follow-on share sale in Adani Enterprises Ltd reserved for anchor investors was fully subscribed last week, institutional and other non-retail investors helped the offer reach desired subscription levels hours before the sale closed, according to data available from BSE.

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) was almost fully subscribed, according to BSE data.

Out of the Rs 20,000 crore proceeds from the FPO, the company had planned to use Rs 10,869 crore for green hydrogen projects, work at the existing airports and the construction of a greenfield expressway.

An amount of Rs 4,165 crore was to be utilised for repayment of debt taken by its airports, road and solar project subsidiaries.

Read the full press statement here: