Guwahati: The chairman of Adani Enterprises Ltd., Gautam Adani, stated on Thursday that it would not be “morally correct” to go with the Rs 20,000 crore share in the current market environment, one day after deciding not to proceed with the fully subscribed Follow-on Public Offer (FPO).
“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 his address to investors after withdrawal of the fully subscribed FPO.
Adani said in his humble journey of over four decades as an entrepreneur, “I have been blessed to receive overwhelming support from all stakeholders, particularly the investor community. It is important for me to confess that whatever little I have achieved in life is due to the faith and trust reposed by them. I owe all my success to them.”
“For me, the interest of my investors is paramount and everything is secondary. Hence to insulate the investors from potential losses we have withdrawn the FPO,” he said.
This decision, he said “will not have any impact on our existing operations and future plans. We will continue to focus on timely execution and delivery of projects.”
“The fundamentals of our company are strong. Our balance sheet is healthy and assets, robust. Our EBIDTA 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.
“Once the market stabilizes, we will review our capital market strategy,” he said.
“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,” Adani said.
“I take this opportunity to thank our investment bankers, institutional investors and shareholders from within and outside the country for giving unflinching support to the FPO.”
Thanking investors, he said, “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.”
A day after the subscription period for its follow-on public offer concluded, Adani Enterprises’ stock price plummeted dramatically on Wednesday. The shares of the flagship business of the Adani Group fell sharply by 26.70%, closing at Rs 2,179.75. Its intraday low was Rs 1,941.2, approximately 30% less than the closing price from Tuesday. The follow-on public offer (FPO) made by Adani Enterprises was completely subscribed on Tuesday, the final day for subscription.
A follow-on public offering (FPO) is when a firm listed on a stock exchange issues shares to investors following its initial public offering (IPO).
According to the data, non-institutional investors drove the demand for the FPO and subscribed to the shares 3.26 times. Institutional investor shares were also oversubscribed.
A diversified conglomerate based in Abu Dhabi named International Holding Company declared on Monday that it will contribute roughly USD 400 million (AED 1.4 billion) through its subsidiary Green Transmission Investment Holding RSC Limited to the Adani Enterprises follow-on public offer (FPO).
For the Rs 20,000 crore follow-on public officers (FPO), the largest ever in India, Adani Enterprises has submitted a red herring prospectus to the market regulator Securities and Exchange Board of India (SEBI). In light of a research by US-based Hindenburg Research that published on January 24, which accused the Adani Group of having bad business fundamentals among others, there were worries that the FPO may not receive a robust response from investors.
The US-based company expressed worries in its study regarding the prospect that shares of Adani group firms could decline from their current levels due to high valuations. In reaction, Adani Group stated on Sunday that the recent analysis by Hindenburg Research was a “planned attack” on India, its growth story, and its goals rather than an attack on any particular company. The story was “nothing but a falsehood,” it added.