‘Important for me to confess…’: Adani to investors on FPO withdrawal

Feb 02, 2023 12:17 PM IST

Gautam Adani's rare address to investors comes a day after his flagship firm abruptly called off $2.5 billion share sale in a dramatic reversal as a rout sparked by a US short-seller's criticisms wiped billions more off the value of the Indian tycoon's stocks.

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).

Indian billionaire Gautam Adani.
Indian billionaire Gautam Adani.

“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.

Thanking the investors for "overwhelming support", Adani said, "It is important for me to confess that whatever important I have achieved in life is due to the faith and trust reposed by them. I owe all my success to them. For me, the interest of my investor is paramount and everything is secondary.

“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 Hence to insulate investors from potential losses we have withdrawn FPO,” he added, insisting that the decision will not have an impact on the group's existing operations and future plans.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.


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