Adani Abruptly Axes IPO as Hindenburg Research Hurts Investor Sentiment
The drama surrounding Adani Enterprises continues to unfold unexpectedly, as the company has taken an extraordinary step to withdraw its $2.5 billion follow-on public offering (FPO) despite being fully subscribed. The company cited “the unprecedented situation and the current market volatility” as the reason for their decision, but many met the move with confusion and surprise.
The decision to pull the FPO came in the wake of Hindenburg Research’s short position in Adani Group companies and the continued sell-off of Adani stocks during Wednesday’s trading session in Mumbai. Though the company’s founder, Gautam Adani, has said the decision to withdraw was made to “insulate” investors from potential financial losses, it’s certainly an interesting move.
In their January 25th report, Hindenburg alleged that Adani Enterprises had exaggerated their “edge” in the renewable energy market and their relationship with various governments, while also claiming that the company was engaging in financial engineering. Though Adani Enterprises have denied all of these allegations, it’s worth noting that their stocks have been gradually dropping since the report was released.