Adani Enterprises Calls Off $2.5 Billion Share Sale

Adani Enterprises Ltd (AEL) has officially canceled its 20,000-crore FPO. The company stated that it will repay the funds collected from FPO investors.

A day after successfully closing the offer, Adani Enterprises Ltd (AEL) abruptly canceled its 20,000 crore follow-on public offer (FPO) on Wednesday evening.

Following a 28.5% decline in its share price on Wednesday, which left the company trading at 31.6% below the lower limit of the FPO price range of 3,112-3,276 per unit, the decision was made. The business declared that it will repay the funds received from FPO investors.

Adani Enterprises opted to cancel its successfully completed Rs 20,000 crore follow-on public offer, which sent its shares plunging 10% in Thursday’s trading. 

Following a Bloomberg article that said Citigroup Inc.’s wealth arm had ceased accepting the securities of the Gautam Adani group of companies as collateral for margin loans, other group stocks experienced significant selling pressure.

At ₹1,915.85 Adani Enterprises reached its lower circuit limit. Adani Enterprises’ announcement to withdraw its FPO may have startled some, but the company’s board believed that it was not morally right to deal with the issue given the instability in the market on the day of the budget, according to Gautam Adani, founder and chairman of the Adani group, on Thursday.

Adani, 60, claimed in a YouTube video that the choice would not have any bearing on the Adani Group’s current activities or long-term goals. He declared that the businesses in his group will keep putting a priority on completing projects on time.

The price of Adani Transmission fell 10% to Rs. 1,557.25. The price of Adani Green fell 10% to Rs. 1,038.05. 

The price of Adani Total Gas dropped 10% to Rs. 1,711.50. Adani Ports decreased 9.48% to Rs 445.50. Adani Power dropped 5% to Rs 202.15, while Adani Wilmar dropped 5% to Rs 421.45.

According to a Bloomberg article, Citigroup’s wealth management division no longer accepts the securities of the Gautam Adani group of companies as collateral for margin loans. 

As Adani’s struggling enterprise sinks deeper into disaster, the US lender decided to limit financing following a similar action at Credit Suisse Group AG, according to a Bloomberg report.

The latest selling of Adani group stocks followed charges of accounting crimes, stock manipulation, and money laundering made by short-seller Hindenburg Research, which also disclosed that it had gone short on Adani group stocks. 

Even though the Adani group has refuted every accusation, the stock price has fallen. According to figures from Forbes, Adani’s personal worth decreased by $15.74 billion just on the day of the budget.