SEBI holds Adani Wilmar IPO due to investigation against Adani Enterprises

Market regulator has "kept in abeyance" the 4,500-crore initial public offering of the agro-commodity company due to an investigation against Adani Enterprises, which is under the lens for foreign portfolio investments.

Market regulator Securities and Exchange Board of India (Sebi) has put on hold the Rs 4,500-crore initial public offering (IPO) of Adani Wilmar due to an investigation that is pending against the flagship entity of ports-to-energy conglomerate Adani Group.

The observations by Sebi on the IPO by agro-commodity company Adani Wilmar have been in “kept in abeyance”, showed the regulator’s website.

Sebi has stalled the Adani Wilmar IPO due to an investigation that is pending against Adani Enterprises, said a person familiar with the matter, asking not to be named. Adani Enterprises owns 50 percent of Adani Wilmar, which makes the popular edible oil brand ‘Fortune’.

SEBI policy requires that if one department of the regulator is investigating a company, a related entity that has filed for an IPO may not get approval for 90 days. This delay can be further extended by another 45 days.

When Moneycontrol reached out to Adani Group for comment, it said it had not received any formal communication from SEBI with respect to the IPO observations being kept in abeyance.

"As regards the query raised by you about the FPI, we would like to mention that we have communicated to media and public at large that the group has no connection with the FPIs, either directly or indirectly. Unfortunately, the media is repeatedly raising the issue time and again misleading the investing community. FPIs are investors like other investors/shareholders in Adani Group and act independently - having no relationship with Adani Group," a spokesperson said.

"While we have always been fully compliant with applicable SEBI Regulations, we have made full disclosure to SEBI on specific information requests from them in the past. We will continue to cooperate with the regulators in the future as well,” they added.

Meanwhile, TMC Lok Sabha MP Mohua Mitra sought clarity and transparency in existing Adani listed companies before SEBI allows yet one more group company to be listed.

Need clarity & transparency in existing Adani listed companies before SEBI allows yet one more group company to be listed

Regulator puts Adani Wilmar’s initial share sale on hold https://t.co/6nRG1FAfXx

— Mahua Moitra (@MahuaMoitra) August 21, 2021

Adani Enterprises is under investigation due to foreign portfolio investments—from entities registered in Mauritius—in the company, said the person cited above. Sebi is yet to receive any communication from the Mauritius regulator on this issue, the person added.

In June, Sebi stalled the IPO by low-cost airline GoFirst due a pending enquiry against the promoters, the Wadias, and Bombay Dyeing, a group company.

Moneycontrol first reported that Adani Wilmar filed for the IPO on August 2. The listing plans of the company were also first reported by Moneycontrol on June 10.

The company is a 50-50 joint venture between Gautam Adani-led Adani Enterprises and Singapore-based Wilmar Group. The JV was formed in 1999.

Adani Wilmar is aiming to be the seventh company from the Adani Group to be listed on exchanges.

The processing status of draft offer documents is being updated on a weekly basis and the status as of August 20, 2021, would be uploaded on the next working day (August 23), according to the Sebi website.