A spooked LIC, shares in free fall forced Gautam Adani’s hand

Why read this story?

Editor's note: India’s largest follow-on public offer to raise Rs 20,000 crore (about $2.4 billion) was cancelled on Wednesday evening, a day after Adani Enterprises managed to close the offer successfully, with global funds and family offices pitching in with generous investments. The Adani group flagship said it would return investors their money. Chairman Gautam Adani cited the “current market volatility” for the sudden decision, and   insisted it was taken to protect investors. “Given these extraordinary circumstances, the Company’s board felt that going ahead with the issue would not be morally correct. The interest of the investors is paramount and hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO,” he said in a message to stock exchanges. But the fact is that had the FPO gone through at a time when Adani Enterprises's shares were in free fall, the investors would have faced losses as soon as they got their shares. And, with no sign of a recovery in the stock’s price on the horizon, investors would have lost faith …