India’s Adani calls off $2.5 billion share sale

NEW DELHI (Reuters) – India’s Adani Enterprises on Wednesday called off its $2.5 billion share sale, citing market conditions, a week after a U.S. short-seller’s critical report unleashed a rout in the wider Adani Group’s stocks.

Commentary

DEVEN CHOKSEY, MANAGING DIRECTOR, KR CHOKSEY SHARES AND SECURITIES

“In the given situation, when the entire environment has become negative, it is good that the share sale is withdrawn. By this, the investor value will be protected and they won’t carry the negative returns on their books.”

RAJESH BAHETI, CHIEF EXECUTIVE, CROSSEAS CAPITAL SERVICES

“I do not know how the markets will behave in the short term. But this is a measure to enhance reputation since the investors were staring at a 30% loss even before the shares were allotted.”

GURMEET CHADHA, CHIEF INVESTMENT OFFICER AND MANAGEMENT PARTNER OF COMPLETE CIRCLE WEALTH

“It was the right thing to do. Taking money at this time when the stock had fallen so far below the FPO price would have invited scrutiny and investor concerns. It must have been a hard decision but it was the right thing to do. The key thing to watch is how U.S.-listed bonds react and that will determine the course of the stocks. We cannot rule out some further selling in the near term.”

EDWARD MOYA, SENIOR MARKET ANALYST AT OANDA

“The pain hitting Adani companies was crippling, so the news that share sale is called off is troubling as this was supposed to show the company is still believed in by its high net-worth investors. To go through this exercise of a share sale and to call it off raises more questions.”

RUSS MOULD, INVESTMENT DIRECTOR AT AJ BELL

“There are also concerns being expressed by non short sellers, long-term only institutions and analysts who’ve looked at the group for a while that there is a lot of debt in the company. And though the company says that it’s manageable and there are plans to deleverage, some people may view that as raising mistakes.”

AVINASH GORAKSHAKAR, HEAD OF RESEARCH AT PROFITMART SECURITIES

“This is a big let down in terms of the group’s reputation, it also indicates that institutional investors developed cold feet.”

“It is unclear when they will be able to tap the market again, and that will derail some of its growth plans.”

(Reporting by Tanvi Mehta in New Delhi, Ira Dugal and Jayshree P Upadhyay in Mumbai, Chris Thomas and Akash Sriram in Bengaluru; Editing by Devika Syamnath)