Adani group shares continued their downward journey on Thursday after the Gautam Adani-led conglomerate shelved the share sale. After the company’s stock crashed 28 per cent on Wednesday, the Adani Group decided to call off the Follow-on Public Offer (FPO) of equity shares aggregating up to Rs 20,000 crore of face value Rs 1 each on a partly paid-up basis, which was fully subscribed.
The decision to not proceed with the FPO despite full subscription was taken at a meeting of the board of directors of the company. “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 withdrawing the completed transaction," the company said in a statement.
Citing the unprecedented crash in stock prices, Adani Enterprises Chairman Gautam Adani said the board felt that going ahead with the FPO would not be morally correct under the extraordinary circumstances.
“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," Adani said in the statement.
Adani Enterprises, the flagship firm of the Adani Group, plunged 28 per cent, triggering panic on Dalal Street just a day after the company’s Rs 20,000 crore FPO sailed through successfully.
The Securities and Exchange Board of India’s (SEBI) is examining the recent crash in shares of Adani Group and looking into any possible irregularities in a share sale, news agency Reuters said, quoting a source.
The source said that the market regulator is undertaking a full-scale examination of the fall in Adani Group shares.
In the last five trading sessions, the market capitalisation of all 10 listed Adani companies are down by Rs 7.5 lakh crore or one-third. Shares of Adani Enterprises itself are down nearly 50% from its 52-week high after a gravity-defying rally in the last few years. The stock, which entered Nifty last year, ended 28.45% down at Rs 2,128.70 today.
Adani Enterprises FPO, which closed yesterday, was oversubscribed 112% as funds started pouring in at the list minute. While the demand from retail investors was low at just 12%, the non-institutional investor category was oversubscribed 3.32 times while that of qualified institutional buyers (QIB) was also oversubscribed 126%.
FPO applicants were to pay 50% money upfront while the rest in subsequent tranches. Retail investors were offered a discount of Rs 64 per share in the issue.
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