Adani Enterprises Ltd has withdrawn its Rs 20,000 crore follow-on public offer (FPO) that was fully subscribed on the final day of the subscription with help form some big Indian conglomerates.

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The firm said the FPO stands withdrawn “given the unprecedented situation and the current market volatility” and all proceeds would be returned to investors.

Gautam Adani, Chairman, Adani Enterprises Ltd, 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 on January 31. 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."

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The firm said pushing ahead with the issue will not be "morally correct".

The company reiterated its balance sheet was very healthy with strong cashflows and secure assets and that calling off the FPO will not have any impact on existing operations and future plans.

All Adani Group stocks were trading in the red on February 1, extending losses from previous sessions.

The Adani FPO was called off despite full subscription. However, retail participation was negligible. Today's drop was the biggest in the company's history and it has halved from its all time high on December 21.

Of the Rs 20,000-crore FPO proceeds, Rs 10,869 crore was to be used for green hydrogen projects, existing airports and construction of a greenfield expressway. And Rs 4,165 crore was to be utilised for repayment of debt taken by its airports, road and solar project subsidiaries.

The stock erosion started soon after a report by US-based Hindenburg Research came out alleging improper use of offshore tax havens and flagging concerns about high debt and the valuations of seven listed Adani companies.

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According to Reuters report, the Securities and Exchange Board of India (SEBI) is examining a recent crash in shares of Adani Group and looking into any possible irregularities in a share sale by its flagship company.

SEBI is undertaking a full-scale examination of the fall in shares, the source said, declining to be identified as the matter is confidential.

The source told Reuters that Sebi is also looking into any possible price manipulation of Adani group stocks, as well as examining possible irregularities in the $2.5 billion share sale of the flagship firm Adani Enterprises.

Earlier in the day, Bloomberg reported that Credit Suisse's private bank had halted margin loans on Adani Bonds. The Swiss lender’s private banking arm assigned a zero lending value for notes sold by Adani Ports and Special Economic Zone, Adani Green Energy and Adani Electricity Mumbai Ltd, Bloomberg said, quoting sources.

First Published:Feb 1, 2023 10:27 PM IST