Road Ahead for Adani: Group calls off Rs 20,000 crore FPO, to return money to investors

Hours after its shares crashed at the bourses, the Adani Group on Wednesday evening decided to call off its Rs 20,000 crore follow-on public offer (FPO), saying that money would be returned to the investors.

The decision was taken after a meeting of the company's Board.

The Adani Enterprises Ltd -- the flagship company of the Adani Group -- on Thursday said it is withdrawing the Red Herring Prospectus (RHP) filed with the Registrar of Companies (RoC) Gujarat.

The move is a follow up to the company's decision on Wednesday not to proceed with its Rs 20,000 crore follow-on public offer and withdraw the RHP on account of the prevailing market conditions.

The company said owing to the extreme volatility in the company's stock price, other commercial and strategic considerations, and to protect the interest of the investors it is withdrawing the follow-on public offer.

The offer agreement dated January 18, 2023 entered into by and amongst the company and the book running lead managers appointed for the Offer, namely, ICICI Securities Limited, Jefferies India Private Limited, Axis Capital Limited, BOB Capital Markets Limited, Elara Capital (India) Private Limited, IDBI Capital Markets and Securities Limited, JM Financial Limited, Monarch Networth Capital Limited, SBI Capital Markets Limited and IIFL Securities Limited, for the purposes of the Offer has been terminated.

According to Adani Enterprises, excluding the cash escrow and sponsor banks, agreement dated January 18, 2023 entered into by the company, and others, including the Monitoring Agency Agreement dated January 17, 2023 entered into with CARE Ratings Limited, are in the process of being terminated.

"Further, we wish to inform you that the company shall forthwith refund to the bidders the entire application bid amounts/ subscription amount received in the Offer in accordance with applicable law. In the event that there is a delay in making refunds beyond such period as prescribed under applicable law, the company shall pay the requisite interest to the bidders in the offer at such rate as prescribed under applicable law," the company said.

"The Board of Adani Enterprises Ltd 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 interest of its investing community by returning the FPO proceeds and withdraws the completed transaction," a statement issued by Adani Enterprises said on Wednesday.

Adani Group Chairman Gautam Adani said, "The Board takes this opportunity to thank all the investors for your support and commitment to our FPO. The subscription for the FPO closed successfully yesterday. Despite the volatility in the stock over the last week, your faith and belief in the company, its business and its management has been extremely reassuring and humbling. Thank you."

The statement, however, added that on Wednesday, the market was unprecedented, and "our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the companya's Board felt that going ahead with the issue would not be morally correct. 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".