Why Did Adani Enterprises Cancel Their Rs 20,000 Crore FPO?
Adani Enterprises, the multi-billion dollar conglomerate, announced the cancellation of its Rs 20,000 crore follow-on public offer (FPO) on Wednesday, February 1st. The cancellation came as a result of stock market fluctuations for a fifth day in a row, triggered by a report from US short seller Hindeburg Research, which raised new allegations of stock market manipulation and money laundering against the company.
Adani Total Gas and Adani Power stocks witnessed a significant decline, while Adani Wilmar and Adani Ports and SEZ managed to recover somewhat. Adani Enterprises was down 1.12 percent at Rs 2,941.60 on the Bombay Stock Exchange (BSE).
The Company’s Statement
In a statement, Adani Enterprises said, “The Board of Adani Enterprises Ltd. (AEL) has 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 interests of its investing community by returning the FPO proceeds and withdrawing the completed transaction.”
The statement further added, “Given these extraordinary circumstances, the company’s board felt that going ahead with the issue would not be morally correct. The interests of the investors are paramount, and hence to insulate them from any potential financial losses, the board has decided not to go ahead with the FPO.”
Also Read: The Unstoppable Journey Of Gautam Adani
What the Experts Say
it’s unusual for a secondary offering like this to be canceled, pulling an offering at the last minute doesn’t inspire a lot of confidence right now.
The sudden cancellation of the FPO has raised questions among experts and investors. Despite the current market volatility and the unprecedented situation, many expected Adani Enterprises to proceed with the FPO, as it was fully subscribed.
Conclusion
Adani Enterprises’ decision to cancel the Rs 20,000 crore FPO has come as a surprise to many. The company’s aim to protect the interests of its investing community and to insulate them from any potential financial losses is commendable. However, the cancellation has raised questions about the current market situation and the future of Adani Enterprises.