India's Adani cancels $2.5bn share sale - Bill Ackman wary of bid

Indian conglomerate Adani Group's flagship company Adani Enterprises has canceled its $2.5 billion share sale, also known as a follow-on public offering, according to a statement released by the company to stock exchanges on Wednesday.

What happened: The board decided not to proceed with the share sale, which was fully subscribed. "Given the unprecedented situation and current market volatility, the company aims to protect the interests of its investment community by returning the FPO proceeds and withdrawing the completed transaction," the company said in a statement. .

Billionaire Gautam Adani said the company's board believes that moving forward with the issue would not be morally correct under the current circumstances. "The interests of investors are paramount and, therefore, to protect them from any potential financial loss, the Board of Directors has decided not to proceed with the FPO. We are working with our portfolio managers to reimburse the proceeds we received in escrow and also to release the monies blocked in your bank accounts for the subscription to this issue," he said.

See also: Mukesh Ambani is once again India's richest man as Gautam Adani's businesses take a massive beating in the market scholarship

Lead investors backing the issuance included Maybank Securities and Abu Dhabi Investment Authority, Reuters reported.

Adani Group shares took a hit following a scathing report from Hindenburg Research last week that accused the conglomerate of misuse of offshore tax havens and said that he held short positions in the company through its US-traded bonds. and derivative instruments not traded in India.

According to a Reuters report, the ensuing equities rout wiped out an estimated $86 billion of investors' wealth. The report, which quotes a source with direct knowledge, also pointed out that the Indian market regulator is looking into the incident.

"Our balance sheet is very healthy with strong cash flow and secure assets, and we have an impeccable track record of servicing our debt. This decision will have no impact on our existing operations. and our future plans,” Adani said.

Ackman's View: Billionaire investor Bill Ackman tweeted his stance on Adani's FPO on Wednesday, saying he wouldn't find it surprising if "the offer is rigged with affiliate marketers in addition to some actual institutional participants like ADIHC."

Last week, Ackman endorsed Hindenburg's report, calling it "highly credible and extremely well-researched".

Photo: Courtesy of Team Finland on flickr

Benzinga now provides actionable financial insights and trading insights for Indian financial markets at in.benzinga.com.

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

...