(Bloomberg) – The flagship company of Indian tycoon Gautam Adani has achieved a record 200 billion rupees ($2.4 billion) in share sales after a sell-off triggered by a report by a US short seller. cause plunged his corporation into turmoil.
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Adani Enterprises Ltd. decided not to proceed with the next public offering, according to a statement late Wednesday. Bloomberg News reported earlier in the day that Adani was about to make a decision to withdraw the share sale, even though it is fully subscribed, with support from prominent Indian and Gulf investors. .
The decision comes after a new round of price cuts for the company and its sister companies. The decline accelerated after Bloomberg News reported that Credit Suisse Group AG had stopped accepting bonds from Adani’s group of companies as collateral for margin loans to its private banking clients.
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“It is unusual for a secondary offering like this to be canceled,” said Ben Silverman, research director at VerityData. “Pull up a last-minute offer doesn’t inspire much confidence right now.”
Adani Enterprises has offered shares to investors at prices ranging from Rs 3,112 to Rs 3,276 per share in the offering. The company’s shares closed on Wednesday at Rs 2,135.35, or 31% below its lowest price, meaning that any investor in selling the shares would be at an immediate loss.
The flagship company said in the statement that it is pulling the deal to protect investors in the offering from potential losses.
“Today’s market volatility is unprecedented, and our stock price has fluctuated throughout the day,” it said in a statement. “Given these exceptional circumstances, the company’s board feels that it would not be ethically right to continue to address the issue.”
Adani Enterprises has secured full registration for India’s next largest share sale on Tuesday, the last day for bidding, amid a minute interest rate hike by existing shareholders and institutional investors. last. The expected completion of the deal is seen as a win for Adani after the Hindenburg Research fraud allegations cast a shadow over the offer.
Read: An Adani company wins analyst support amid $92 billion crash
The company said it is working with lead bookkeepers to refund the proceeds in escrow and also free up the blocked amount in the bank account to register the issue.
India’s SGX Nifty 50 Index futures extend losses to 0.8% following Adani’s decision. The index did not change prior to the announcement.
–With support from Yiqin Shen.
(Updated to include comment in fourth paragraph.)
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