Adani canceled a $2.5 billion sale of shares as regulatory concerns grew

Adani group pictured outside Mumbai’s Chhatrapati Shivaji International Airport in Mumbai on July 28, 2021 (Photo by Indranil Mukherjee/AFP) (Photo by Indranil Mukherjee/AFP via Getty Images)

Andranil Mukherjee | Afp | Getty Images

On Wednesday, Gautam Adani announced that he had canceled his company’s $2.5 billion share sale.

And he withdrew the offering of shares in Adani Enterprises, the flagship company of India’s Adani Group, after the stock fell about 30%.

Breaking his silence on the media, Al-Adani said, “Today the market was unprecedented, and our share price fluctuated throughout the day. Under these exceptional circumstances, the company’s board of directors felt that moving forward with the case would not be ethical. Right.”

in Report Jan 24Hindenburg Research, a short-selling firm, alleged that “The Adani Group has engaged in brazen stock manipulation and accounting fraud scheme.” The report continued to raise concerns about the debt and valuation of seven Adani companies.

Adani Group has denied the allegations, saying that they are “baseless” and stem from ignorance of Indian law. She added that the group has always made the necessary regulatory disclosures.

Speculation is mounting that the Securities and Exchange Board of India (SEBI) will conduct some kind of investigation into Adani’s business.

“My understanding is that revocation could mean a mandatory SEBI investigation,” Prameet Choudhury, head of South Asia practice at Eurasia Group, told CNBC.

Chaudhry, like many, said he was “surprised” to see Adani’s plans scrapped after the $2.5 billion target was met.

The stunning pullback in the week Adani went on a complete mission to ensure a successful sale of his shares after huge pressure associated with the drop in his share price.

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Adani tapped high net worth individuals within India and looked to the Middle East as well. The International Holding Company, an Abu Dhabi-based conglomerate, contributed 400 million dollars for the deal. It was widely seen as a vote of confidence. A source familiar with the matter told CNBC that Goldman’s trading desk was also involved in the deal. Adani Enterprises stock closed higher on Tuesday after news of a $2.5 billion full IPO.

Investors woke up to an ugly picture on Wednesday when Adani Enterprise stock plunged, dropping as much as 28% and prompting Adani to cancel a sale of its shares.

“We are working with our BRLMs to recover the proceeds we received into the escrow account and also to release the blocked amounts in your bank accounts for involvement in this issue,” Addani added.

The move also raises questions about where else Adani will look for financial support.

On behalf of CNBC mentionedAdani has established relationships with a range of international banks and private equity investors. Billionaire, once The second richest person In the world, to the thirteenth place in Bloomberg Billionaires Index As of February 1.

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