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Adani Enterprises Limited canceled the fully subscribed FPO worth Rs 20,000 crore late on Wednesday night. Investors’ money will be returned. On Wednesday, shares of Adani Enterprises fell 26.70% to close at Rs 2,179.75. Adani Group has decided to withdraw the FPO due to the tremendous fall in the stock.
Gautam Adani gave a video message after canceling the FPO. In this, the investors were thanked. Your confidence in the company’s business and its management is reassuring to us, despite the volatility in the stock over the past week. For me the interest of my investors is paramount. Everything else is secondary. Therefore, to protect the investors from possible losses, we have withdrawn the FPO. The board felt that it would not be ethically correct to go ahead with the FPO.
Adani Enterprises issued a press release on Wednesday. Here we are giving its text…
Adani Group said, in order to protect investors from any future financial loss, the board has decided not to go ahead with this FPO. We are working with our Book Running Lead Managers (BRLMs) to issue refunds to our people. Our balance sheet is very strong at the moment. Our cash flow and assets are secure. Also, we have a healthy record of servicing loans.
Our decision will not affect our current operations and our future plans. We will continue to focus on long term value creation and our growth will be managed from internal resources. Will review our capital market strategy as soon as the market stabilises. We are sure that we will continue to get your support. Thank you for trusting us.
The price band of FPO was Rs 3,112-3,276.
Adani Group’s Rs 20,000 crore FPO opened for subscription on January 27 and closed on January 31. Its price band was kept at Rs 3,112-3,276 per share. The company wanted to reduce the existing debt with this money and raise additional capital for expansion.
What is FPO
FPO stands for Follow on Public Offer. It is a way of raising money for the company. The company which is already listed in the stock market offers new shares to the investors. These shares are different from the shares present in the market. Mostly these shares are issued by the promoters. FPO is used to make changes in the equity base of the company.
What is the difference between IPO and FPO?
Companies use IPO or FPO for their expansion. The company launches its shares in the market for the first time through Initial Public Offer ie IPO. While in FPO additional shares are brought to the market.
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