The market regulator Securities and Exchange Board of India (SEBI) has kept Adani Wilmar draft prospectus in abeyance.
In its latest observations on Adani Wilmar Ltd's recently filed initial public offering (IPO) papers for the Rs 4,500 crore issue, Sebi's website mentions in "abeyance".
Sebi, however, did not specify the reason for putting the approval process of Adani Wilmar on hold.
The IPO has been put on hold due to an investigation that is pending against the flagship entity of ports-to-energy conglomerate Adani Group, said a report in Moneycontrol, citing a person familiar with the matter.
Sebi, DRI probing Adani Group firms
On July 19, the Minister of State for Finance Pankaj Chaudhary told Parliament in a written response that SEBI was investigating Adani Group companies for non-compliance with rules.
"SEBI is investigating some Adani Group companies with regard to compliance with SEBI Regulations. Further, the Directorate of Revenue Intelligence (DRI) is investigating certain entities belonging to the Adani Group of Companies under laws administered by it," Chaudhary said.
In a written reply to a question, the minister said accounts of three of the six Mauritius-based funds, that have invested most of their money in Adani Group firms, were frozen in 2016 over the issuance of Global Depository Receipt (GDR) by certain listed firms. No freeze was ordered for their holding in other firms.
"Sebi is investigating some Adani Group companies with regard to compliance with Sebi regulations," the minister said, without giving details.
Also, DRI "is investigating certain entities belonging to the Adani Group of Companies under laws administered by it," he said, PTI reported.
The minister did not name which of the Adani Group companies were being investigated by Sebi and DRI. He also did not elaborate on the nature of the violation.
He, however, said the Enforcement Directorate (ED) wasn't investigating the Adani Group.
Shares of the port-to-energy group nosedived in June after reports that accounts of three of the six Mauritius-based funds that have invested most of their money in Adani Group firms had been frozen by the national share depository. The three funds owned about $6 billion of shares across the conglomerate.
The Adani Group on June 14 denied the report of the freeze, calling it "blatantly erroneous". A day later it clarified that three demat accounts of Cresta Fund Ltd, Albula Investment Fund Ltd and APMS Investment Fund were "suspended for debit", adding to the confusion over the status of the offshore funds.
Shares of Adani Total Gas Ltd, Adani Power Ltd, Adani Transmission, Adani Ports & Special Economic Zone , Adani Green Energy and flagship Adani Enterprises were impacted by the reports.
Prior to the episode, some of Adani Group's listed stocks had soared more than six folds in value since the start of 2020.
Adani Wilmar files DRHP with Sebi
On August 3, edible oil major Adani Wilmar Ltd had filed the draft red herring prospectus with markets regulator Sebi for an initial public offer to raise up to Rs 4,500 crore.
The company, which sells cooking oils under the Fortune brand, is a major player in the edible oil industry.
"The proposed listing of AWL on the stock exchanges will comprise an IPO in the form of fresh issue of new equity shares by AWL for an amount of up to Rs 45,000 million (approximately $600 million).
"There will not be any secondary offering," Adani Enterprises Limited (AEL), the flagship firm of Adani group, said in a regulatory filing.
AEL said net proceeds from the IPO (Initial Public Offer) are proposed to be used by AWL to fund capital expenditure for expansion of existing manufacturing facilities. The funds will also be utilised for developing new manufacturing facilities, repayment/prepayment of borrowings, to fund strategic acquisitions and investments, and general corporate purposes.
"The proposed listing is intended to further the growth of AWL's operations by increasing its market visibility and awareness among current and potential customers," it said.
According to AEL, the proposed listing and issue price of the IPO shares are subject to many factors, including but not limited to the book building process under Indian regulations, receipt of applicable approvals and external factors such as price/earnings ratio, level of investor interest, prevailing market conditions and certain other considerations.
"As there is no assurance that the proposed listing will proceed, shareholders and potential investors are advised to exercise caution when dealing with the securities of the company," the filing said.
AWL is a 50:50 joint venture company between the Adani group and the Wilmar group.
Currently, six Adani group companies are listed on domestic bourses. Apart from AEL, other listed ones are Adani Transmission, Adani Green Energy, Adani Power, Adani Total Gas, and Adani Ports and Special Economic Zone.
(With PTI inputs)
(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)