In the midst of ongoing controversy, Adani Enterprises decided to suspend its Follow-On Public Offering (FPO) and return investor funds after American short-seller Hindenburg Research accused the business of utilizing tax havens and raised debt concerns in a report.
Adani Enterprises stated in an exchange filing that the board of directors of the company decided on February 1, 2023, not to move forward with the further public offer (FPO) of equity shares totaling up to Rs 20,000 crore with a face value of Rs 1 each on a partly paid-up basis, which was fully subscribed.
The decision was made, according to Gautam Adani, Chairman of Adani Enterprises, in the midst of the swings that the group’s equities experienced during the day’s trading.
The company is coordinating with its Book Running Lead Managers to release the funds held in escrow for investors’ bank accounts as well as to reimburse the money it received in escrow.
In response to news that Credit Suisse no longer accepts Adani firms’ bonds as collateral for margin loans, Adani Enterprises experienced a nearly 26 percent decline, closing at Rs 2,180.20 per share on the BSE. Adani Ports, a different group stock, too experienced a 20% decline in price and closed at $492.15 per share. Ambuja Cements’ 16.56 percent drop to close at Rs 334.60 and ACC’s 5.96 percent drop to close at Rs 1,852 contributed to the group’s additional decline.
The business pulled back its record domestic stock offering after the Adani group’s stock price crashed by $92 billion.
Following a report by Hindenburg Research last week alleging stock manipulation and inappropriate use of offshore tax havens by the Adani Group, the shares of the group’s firms have continued to drop. The research company also expressed concern about the valuations of the seven listed Adani companies and their high debt levels.
The charges have been refuted by Adani Group, which said that the short-sellers claims of stock manipulation are unfounded and reflect a lack of legal knowledge. It said that it has always provided relevant regulatory disclosures.
