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Financial Distress for Adani: Bonds Sink and FPO Pulled Amid Controversy

Adani Enterprises Ltd’s board decided to scrap its ₹20,000 crore follow-on public offering (FPO), due to investor protection concerns, as the sell-off in Adani shares continued for a fifth day after the Hindenburg report was released alleging Adani enterprises of accounting fraud and stock manipulation. The move caused a significant drop in the Adani IPO share price. 

In an announcement to stock exchanges on Wednesday, Adani Enterprises said, “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 withdrawing the completed transaction.“

On a day when the shares of Adani Enterprises saw a sharp decline of nearly 29%, the company’s decision to withdraw dealt a significant blow to both institutional investors and family offices who had saved the offer on the final day.

The sell-off in Adani shares resulted in a drop in the Adani Enterprises share price and caused a combined loss of ₹1.84 trillion in investor wealth for the group’s stocks. Over the past five days, the market cap of the Adani group has decreased by ₹7.56 trillion, leading to founder Gautam Adani losing his title as India’s richest person to Mukesh Ambani. 

The FPO ended on Tuesday. In the words of Gautam Adani, chairman of Adani Enterprises, “Despite the volatility in the stock over the last week, your faith and belief in the company, its business and its management has been extremely reassuring and humbling. However, today, the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the company’s board felt that going ahead with the issue will not be morally correct.“

Experts’ Opinions on FPO Withdrawal

A senior banker says, “Anchor and HNI investors, who’ve pumped most of the money into the FPO, have hell to pay for, taking a 30% haircut from Day 1 after the offer closed. The only way to salvage the situation was by calling off the FPO.“

A prominent fund manager referred to the withdrawal as a “disaster,” suggesting that investors in the offering had grown “uncomfortable” following the substantial drop in the stock price. This could also have implications for the group’s ability to raise capital.

Adani Secvolt

 

How Has The Setback Affected The Stocks & Valuations of Adani Enterprises? 

Adani’s net worth fell by $14 billion to $74.7 billion, causing him to drop to 15th on Forbes’ Billionaires list. Adani Ports experienced a 19.2% drop to ₹495.15, Ambuja Cements declined by 16.7% to ₹334.10, ACC fell by 6.19% to ₹1,846.45, and Adani Total Gas dropped by 10% to ₹1,897.40. 

Stocks traded on both cash and derivatives segments, such as Adani Ports, Adani Enterprises, ACC, and Ambuja Cements, are subject to more volatility as they do not have any price circuits in place. The promoter pledge in Adani Ports has increased to 19.25% after an additional 3.25% was pledged on January 27th and 31st. The recent increase in shorting has led to a ban on Ambuja Cements F&O contracts for trading in the derivatives segment, as the number of outstanding shares held by clients has crossed the exchange threshold. The Hindenburg report and its allegations of corporate fraud have caused a significant drop in the Adani IPO share price.

Here’s What The Founder Has To Say About The Future Plans for Adani Enterprises

Despite the recent setback, Adani’s founder Gautam Adani reassured that the cancellation of the offering would have no impact on their current operations and future plans. The company is focused on creating long-term value and plans to finance growth through internal accruals. Once the market stabilizes, they will reevaluate their capital market strategy. 

Adani stated that their balance sheet is in good health with strong cash flows and secure assets, and they have a solid history of paying off their debt obligations. The company is also working with investment bankers to return the share subscription funds to investors. Let’s see what more Adani’s fortune has in store for the investors! 

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Ashish Verma

Ashish Verma is the founder and CTO of Secvolt, with close to 10 years of experience in the IT industry. He has been the technical backbone of the company and has worked tirelessly to make the technical infrastructure robust. He is a passionate entrepreneur who generates solutions that have the potential to bring change.

In order to ease the client’s interaction with Secvolt, he has strived to develop the business’s technological foundation and establish a user-friendly platform. Ashish has also contributed substantially to smoothening the company’s administration and ensuring that there are no lacunae in the broad structure of the organization. 

Early Years

Coming from a middle-class family, he was aware of the problems that people faced while using technology. He sought to create something that was simple to use yet had a powerful effect. As he studied computer science, he became eager to offer a solution to real issues. He began his professional career at Amdocs, where he gained expertise in client management while catering to more than 20 clients. Later, he moved to Citicorp, where he had exposure to the investment industry. His time at Amdocs and Citi enabled him to produce high-standard, efficient, and scalable technical infrastructure.

He left corporate jobs for his startup because he was passionate about working on the concept of a smart city platform. He expanded the concept internationally and even collaborated with Global Dignity-Kuwait. Things didn’t work out for him the first time. He states, “My failures didn’t stop me from experimenting and trying new things.” He rose from the ashes like a phoenix and founded FewerClicks, an End to End IT solution company.

He worked on the creation of Solster Finance, a decentralized financial platform based on the Solana blockchain. He created this platform single-handedly which has helped the team raise a $1M investment and a revenue of more than $5M within 6 months of launching. 

He has previously worked on many blockchain technologies and cryptocurrency ventures, which include Decentralized Finance Applications (Defi), Decentralized Applications (Dapps), File Contracts (SIA, record-keeper), Smart Contracts (rust, solidity), and NFT Development. His experience and effective communication have helped many team members understand Secvolt effectively and the underlying technology it is powered by.

He possesses the ideal combination of strategic thinking and excellent business insight. He is responsible for formulating technical aspects of the company’s strategy to guarantee alignment with business objectives. With his drive to experiment with new technologies, he has helped Secvolt achieve a competitive edge. Being in charge, Ashish never holds back in encouraging the different departments to make profitable use of technology, helping to grow as an unstoppable team at Secvolt!

Hanif Shaikh

Hanif Shaikh is the founder and CMO of Secvolt, with over 8 years of experience in the industry. He plays a crucial role when it comes to the growth of Secvolt. Since the beginning, he has acted as a mentor for each and every employee of the company, and he makes an effort to be accessible to his staff anytime they need him. 

Hanif first entered the Blockchain and Crypto world in 2016, and nothing has stopped him since. He views blockchain as a transparent platform that provides authority and accountability back to the people. He consistently believes that “overcommunication is better than miscommunication.” He has lived by this motto with his staff, clients, and networks.

Early Years

Hailing from Gujrat, a state in India, he is following his dream to contribute to making this world a better place. In the process, he has struggled, made some mistakes, and learned lessons from those mistakes to achieve success in life. His entrepreneurial attitude dates back to his childhood when he learned from his father’s business and aspired to have it all. He came from a humble background and had ambitions to succeed in life.

He has developed two successful businesses from scratch, and in the process, he has inspired young people to start their own businesses. He was an integral part of the Quora Mumbai Meetups and helped it become a great success in a short period of time. Later, he began organizing meetups to raise awareness about blockchain, cryptocurrencies, and their applications. He also shared his knowledge of ICOs, highlighted reputable ICOs, and established a small cryptocurrency community on WhatsApp groups.

He chose to go on a Blockchain Tour in India in 2019 and met some fascinating people. Throughout his journey, he has been able to build an extensive and robust network that has aided Secvolt’s growth. Because of his expertise and understanding of the Crypto Industry, he has been featured on several news channels and has advised the youth on the subject.

He is in charge of the company’s marketing operations and is responsible for developing its marketing strategy and vision. He oversees a group of passionate marketing professionals and plans promotional strategies with the goal of making  Secvolt a global brand. 

He is a perfect blend of a practical attitude and innovative business acumen. He believes in the ability of individuals to perform exceptionally well when given an environment to experiment and explore their passions; a culture that he has built at Secvolt.

Divakar Choudhary

Divakar Choudhary is the founder and CEO of Secvolt who has been trading for more than six years now. He started the business in 2018 with the conviction that if anybody could dominate the market, it was him. He poured all of himself into the business and turned Secvolt into a market-beating machine.

Divakar developed the fundamental quant models that perform risk management and capture alpha using his skills from the previous organization and his time spent in the market. In order to make the system effective, he backtested risk mitigation algorithms and worked on them for more than 4 years to produce results.

Early Years

He began his crypto journey in 2013 after getting his first gaming Laptop and melded in with the Blockchain community like sunbeams on the ocean. He created many YouTube channels at the age of 15 and businesses by the time he was 17. Technology has always piqued Divakar’s interest. He endeavored and succeeded at freelancing in his effort to achieve financial independence. However, he soon realized that freelancing would always keep him in the rat race, and the only way out would be to build a machine yielding generational wealth.

Soon, he started trading using his own capital but suffered a loss in the market. He says, “95% of people lose money & the rest 5% make money from the loss of those 95%.” He then began working on an effective technique to be included in this 5% after losing part of his own assets during the early stages of trading. He began evaluating quant strategies using statistical models.

With his methodology, he once produced a 20% ROI in a single month. With the zeal of creating something exceptional, he borrowed money from friends and family and generated decent returns for them using primitive quant models. Month after month, the system’s efficiency and the competence of the man behind it allowed for excellent market returns.

In the beginning, Divakar worked on his laptop for over 18 hours. It took every ounce of his energy as he executed about 530+ deals daily for 4 years to create this company from the ground up. In 2021, he increased his volume by 827%, trading a total of $52 million and hitting a single account.

In his words-

“What does becoming “THAT” GUY mean to you? Who did you need when you were young? Be that person!”

He is a perfect example of someone who followed his passion and made a fortune from it! He dreamt of creating generational wealth as a youngster, envisioned it as an adult, and is now making it a reality with Secvolt!