Following the withdrawal of the Follow-On Public Offering (FPO) by Adani Enterprises, the company has now shelved a plan to raise around Rs 10 billion ($122 million) via a public bond sale, reported Bloomberg. This would have been the firm’s first-ever public sale of bonds.
The report cited people familiar with the matter saying that the Adani group had planned the public note issuance for January but the plan is being shelved following the share price crash in recent days. Adani stock crisis started after US-based short-seller Hindenburg Research last month accused it of stock manipulation and accounting fraud. The group has vigorously denied the allegations.
According to the report, Adani Enterprises was working with Edelweiss Financial Services Ltd., AK Capital, JM Financial, and Trust Capital, for the bond issuance but the activity has now stopped.
The report says that according to Moody’s Investors Service, the market collapse will probably make it harder for the Adani group to raise money for capital projects or to refinance debt over the next year or two.
Adani Enterprises withdraw a Rs 20,000 crore follow-on public offering of shares last week due to the share market price crash. A day after its chairman, Gautam Adani said that the decision to withdraw the offering was considered after volatility was seen in the market and that “the board felt that it would not have been morally correct to proceed with FPO”.
“Once the market stabilizes, we’ll review our capital market strategy. We have a strong focus on ESG & every business of ours will continue to create value in a responsible way. The strongest validation of our governance principles comes from our several int’l partnerships,” Gautam Adani said in his statement.
Adani Group stocks have been under stress since Hindenburg in its research report titled ‘Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History’, questioned the accounting and corporate governance practices of Adani Group, and also raised the issue of heavy debt last week.
The allegations were strongly refuted by the Adani Group which said Hindenburg’s report is timed with a “mala fide intention” to damage Adani Enterprises FPO.