Adani Enterprises on Wednesday said it has decided to withdraw its fully subscribed Rs 20,000-crore follow-on public offer (FPO) and will return the proceeds to investors.

The announcement came a day after the company's FPO was subscribed fully on the last day of the offer on Tuesday.

"The Board of Adani Enterprises Ltd., (AEL) decided not to go ahead with the fully subscribed FPO. 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 withdraws the completed transaction," the Adani group's flagship company said in a statement.

As many as 4.62 crore shares were sought as against an offer of 4.55 crore. Non-institutional investors put in bids for over three times the 96.16 lakh shares reserved for them, while the 1.28 crore shares reserved for qualified institutional buyers (QIBs) was almost fully subscribed, according to BSE data.

There was, however, muted response from retail investors and company employees.

Gautam Adani, Chairman, Adani Enterprises Ltd said, the subscription for the FPO closed successfully on Tuesday. 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. Thank you".

However, today the market has been unprecedented, and the company's 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. The interest of the investors is paramount and hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO," Adani said.

The company said that its working with its Book Running Lead Managers (BRLMs) to refund the proceeds received in escrow and to also release the amounts blocked in Investors bank accounts for subscription to this issue.

The company also said that its balance sheet is very healthy with strong cash flow and secure assets, and has an "impeccable track record of servicing our debt".

"This decision will not have any impact on our existing operations and future plans. We will continue to focus on long term value creation and growth will be managed by internal accruals. Once the market stabilizes, we will review our capital market strategy," the statement noted. Shares of Adani Group firms slumped on Wednesday and have lost more than Rs 7 lakh crore of their combined market capitalisation in the last five trading sessions amid concerns over US-based short seller Hindenburg Research's report.

The decline is about 38 per cent compared to the market valuation at the end of trading on January 24, the day when the report was released.

Adani Group stocks have taken a beating on the bourses after Hindenburg in the report made a litany of allegations, including fraudulent transactions and share price manipulation, at the Gautam Adani-led group. Adani group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements. It called the Hindenburg report baseless and has threatened to sue the tiny New York short seller.