Adani Enterprises calls off FPO, will return investors' money
What's the story
In an unexpected but not surprising move, Adani Enterprises has called off its fully-subscribed Rs. 20,000 crore follow-on public offer (FPO). The decision was taken at a meeting of its board of directors.
This comes after its shares fell around 30% today.
The company mentioned that it would refund the amount to the investors, and that the decision was taken considering the market volatility.
Official words
What did Gautam Adani say
"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," Adani Enterprises Chairman Gautam Adani said.
"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."
Series of events
How did it all start
For context, it got triggered after Hindenburg Research published a 129-page report on Adani Group, accusing the conglomerate of creating and managing "a vast labyrinth of offshore shell entities" in tax havens.
Subsequently, the Securities and Exchange Board of India (SEBI) started investigating the huge crash in the shares of the Adani Group and looking into irregularities in share sale, per news agency Reuters.
Details
Hindenburg v/s Adani Group: The story so far
Last week, Hindenburg published a report accusing the Adani Group of market manipulation with the help of offshore shell companies and accounting fraud.
The activist investment firm also raised suspicions about the conglomerate's high debt and the sky-high valuations of its listed companies.
Adani Group came out with guns blazing, with its legal head calling the report "maliciously mischievous."