‘Not morally correct to proceed’: Adani to investors on FPO withdrawal

Indian billionaire Gautam Adani, whose fortunes took a rare hit following a scathing report by US short seller, on Thursday said his flagship firm Adani Enterprises withdrew its $2.5 billion share sale to insulate investors from potential losses.

In an address to investors, Adani said the board felt it would not be “morally correct” to proceed with the follow-on public offering (FPO).

“After a fully subscribed FPO, yesterday’s decision of its withdrawal would have surprised many. But considering the volatility of the market seen yesterday, our board strongly felt that it wouldn’t have been morally correct to proceed with FPO,” Adani said.

“For me, the interest of my investors is paramount and everything is secondary. Hence to insulate investors from potential losses we have withdrawn FPO,” he added, insisting that the decision will not have an impact on the group’s existing operations and future plans.

Adani-related shares have plunged in recent days after Hindenburg Research accused the group of “brazen” stock market manipulation and accounting fraud, among other financial abuses. The report by Hindenburg has triggered an $86 billion erosion in the market capitalisation of seven listed Adani Group companies.

Adani stressed that the fundamentals of his company are “very strong” and its balance sheet is healthy.

“Our EBITDA 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,” he said.

“Once the market stabilizes, we will review our capital market strategy. We have a strong focus on ESG and every business of ours will continue to create value in responsible way. The strongest validation of our governance principles, comes from our several international partnerships,” he added.