“The interest of my investors is paramount and everything is secondary,” is what Gautam Adani, chairman of the Adani Group, said on Thursday in his address to investors. He was speaking in a video address clarifying on the decision to withdraw Adani Enterprises’ fully-subscribed Rs 20,000 crore follow-on public offer.
But, his words did little to calm market sentiments on Thursday as the sell-off in most of the group’s listed companies continued in the wake of the FPO withdrawal and reports of market regulator SEBI seeking info on the crash. The flagship Adani Enterprises plunged 26.50 per cent today to close at Rs 1,564.70 and Adani Ports and Special Economic Zone declined 6.13 per cent to Rs 462.
Elsewhere, while Adani Green, Adani Transmission and Adani Total Gas hit their 10 per cent lower circuit levels, Adani Wilmar, Adani Power and NDTV touched their 5 per cent lower circuit limits. Adani Group’s bonds have also fallen sharply.
Cement majors Ambuja and ACC, however, ended in the green. While Ambuja Cements surged 5.3 per cent, ACC was up 0.1 per cent, after the Adani group clarified that none of the shares of the two group companies had been pledged by promoters.
“The promoters have only provided non-disposal undertaking and accordingly, there is no requirement of providing any top-up of shares of Ambuja and ACC or cash top up under the acquisition financing raised last year,” it said.
Since US-based short-seller Hindenburg released a scathing report on the Adani Group last Wednesday, accusing the ports to energy conglomerate of “stock manipulation” and “accounting fraud”, the market capitalisation of Adani Group companies has fallen over Rs 8 lakh crore. Adani Group has denied the allegations in the report.
Late on Wednesday, Adani Enterprises announced that it was withdrawing its Rs 20,000 crore FPO in the wake of the market volatility. The issue was subscribed on Tuesday after strong response from non-institutional investors, including family offices of a few big corporates.
"After a fully subscribed FPO, yesterday's decision of its withdrawal would have surprised many. But considering the volatility of the market seen yesterday, the board strongly felt that it would not be morally correct to proceed with the FPO," Adani said.
Despite the stock price crash, Adani has maintained that the group’s balance sheet is healthy and assets are robust.
“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.
On Thursday, the issue also reverberated in the Parliament, with the opposition parties seeking a probe into the allegations made by Hindenburg against the Adani Group.
The Securities and Exchange Board of India may have already taken note of the developments around Adani Group. According to Reuters news agency, the market regulator is examining the crash in shares of Adani Group and possible irregularities in the share sale.
Some reports also say that the RBI has sought details from banks on their exposure to Adani Group. So far, neither SEBI nor RBI has officially issued any statements.
Any investigation will only raise the spotlight on Adani Group and Gautam Adani.
