Indian billionaire Gautam Adani’s flagship company Adani Enterprises Ltd has pulled out of a $2.4 billion fully subscribed Follow-on Public Offer (FPO) after criticism from a US short seller prompted a selloff of the stock this week.
Adani Group’s companies have lost US$92 billion in value in recent days according to Bloomberg, with Adani Enterprises down 28% and Adani Ports and Special Economic Zone shedding 19% on Wednesday.
The company said in a statement, given the unprecedented situation and the current market volatility, that it aims to protect the interest of its investing community by returning the FPO proceeds with the withdrawal of the completed transaction.
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Adani Enterprises chairman Adani said: “Given these extraordinary circumstances, the company’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,” he added.
Adani noted that the decision would not have any impact on its existing operations and future plans and that once the market stabilizes the company would review its capital market strategy.
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