Gautam Adani Tells Investors FPO Called Off Due To "Market Volatility"

Billionaire Gautam Adani today said the fundamentals of his conglomerate are "strong" as he explained the decision to call off a blockbuster share sale amid plunging stocks after a US short-seller's critical report. In an address to investors, Mr Adani said the decision "would have surprised many" but considering the volatility of the markets yesterday, the Adani Board felt it would not have been morally correct to proceed with the Follow-on Public Offer (FPO).

"In my humble journey of over 4 decades as an entrepreneur I have been blessed to receive overwhelming support from all stakeholders particularly the investor community. It is important for me to confess that whatever little I have achieved in life is due to the faith and trust reposed by them. I owe all my success to them. For me, the interest of my investors is paramount and everything is secondary. Hence to insulate the investors from potential losses we have withdrawn the FPO," Mr Adani said in his video statement.

Adani Enterprises announced its decision late last night to call off its Rs 20,000-crore FPO a day after it was fully subscribed, and said it will return the proceeds to investors.

Adani Group companies have lost $104 billion in market value for the group's stocks in the fallout of US short seller Hindenburg Research's fraud allegations against the conglomerate. The shares of Adani Group firms continued to be volatile today as shares of its flagship firm, Adani Enterprises, went down 10 per cent.

Mr Adani said once the market stabilized, the group would review its capital market strategy.

"This decision will not have any impact on our existing operations and future plans. We will continue to focus on timely execution and delivery of projects. The fundamentals of our company are strong. Our balance sheet is healthy and assets, robust. Our EBIDTA levels and cash flows have been very strong and we have an impeccable track record of fulfilling our debt obligations. We will continue to focus on long term value creation and growth will be managed by internal accruals," Mr Adani said.

"We have a strong focus on ESG and every business of ours will continue to create value in a responsible way. The strongest validation of our governance principles, comes from several international partnerships we have built across our different entities. I take this opportunity to thank our investment bankers, institutional investors and shareholders from within and outside the country for giving unflinching support to the FPO," he added.

The FPO sailed through despite a scathing report by US-based short-seller, Hindenburg, that pummeled stocks in Adani group companies. Hindenburg Research's January 24 report flagged concerns about the group's high debt levels and its suspected improper use of tax havens.

The Adani group released a 413-page response, calling the report a "calculated attack" on India and its institutions.

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