Adani Enterprises shares tank 26% as Group calls off Rs20k cr subscribed FPO

New Delhi: Shares of Adani Enterprises tumbled over 26 per cent on Thursday, a day after the firm said it has decided not to go ahead with its Rs20,000-crore Follow-on Public Offer (FPO) and will return the proceeds to investors. The stock tanked 26.50 per cent to settle at Rs1,564.70 on the BSE. During the day, it tumbled 28.88 per cent to Rs1,513.90 -- its 52-week low. Most of the other group firms also declined for the sixth day in a row. The 10 listed Adani Group firms have faced an combined erosion of over Rs8.76 lakh crore in 6 days. Shares of Adani Transmission fell 10 per cent on Thursday, Adani Green Energy tanked 10 per cent, Adani Total Gas 10 per cent, Adani Ports 6.13 per cent, Adani Wilmar 5 per cent, NDTV 4.99 per cent and Adani Power lost 4.98 per cent.

Many of the group firms also hit their lower circuit limits during the morning trade. However, shares of Ambuja Cements jumped 5.33 per cent and ACC inched up 0.05 per cent. Adani Group stocks have taken a beating on the bourses after US-based Hindenburg Research made a litany of allegations in a report, including fraudulent transactions and share price manipulation at the Gautam Adani-led group.

Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements. "The Board of Adani Enterprises Ltd., (AEL) decided not to go ahead with the fully subscribed FPO. Given the unprecedented situation and the current market volatility, the company aims to protect the interest of its investing community by returning the FPO proceeds and withdraws the completed transaction," the company said in a statement late on Wednesday. As many as 4.62 crore shares were sought as against an offer of 4.55 crore. Non-institutional investors put in bids for over three times the 96.16 lakh shares reserved for them, while the 1.28 crore shares reserved for qualified institutional buyers (QIBs) were almost fully subscribed, according to BSE data.

There was, however, a muted response from retail investors and company employees. Retail investors, for whom roughly half of the issue was reserved, bid for just 11 per cent of the 2.29 crore shares earmarked for them. Employees sought 52 per cent of the 1.6 lakh shares reserved for them. Adani Enterprises, the flagship company of the Adani Group, had a lacklustre start to its FPO, with only a 1 per cent subscription on the first day of the share sale. The offer was opened for public subscription from January 27-31. Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said the rout in Adani Group stocks continued to play havoc on domestic markets as benchmark indices gyrated sharply intra-day before recouping lost ground.

In volatile trade, the 30-share BSE benchmark Sensex ended 224.16 points or 0.38 per cent higher at 59,932.24. "Participants were anticipating some respite after the dovish tone from the US Fed, however continuous decline in Adani group counters combined with the scheduled weekly expiry kept the tone negative for most of the session," said Ajit Mishra, VP - Technical Research, Religare Broking Ltd.