In a fresh blow to Azure Power Global Ltd, the New York Stock Exchange has suspended trading in its stock and has said it will start proceedings to delist the India-focused renewable power company.
The exchange said Thursday that its regulatory arm reached the conclusion that Azure’s shares were not suitable for listing as it had delayed its filings with the US Securities and Exchange Commission (SEC) for the financial year ended March 2022 and the half-year ended September 2022.
The decision came after the company made a disclosure on July 13 that it would not be able to file its papers with the SEC by the July 15 deadline. Azure has a right to approach the NYSE’s board for a review of the decision.
Azure’s shares crashed nearly 80% after the NYSE’s decision to $0.34 apiece, dragging its market value down to less than $22 million.
Azure is majority owned by Canadian pension funds Caisse de dépôt et placement du Québec (CDPQ) and Ontario Municipal Employees Retirement System (OMERS). While CDPQ owns over 53% of the company, OMERS holds more than 21%. CDPQ pumped more than $400 million between 2017 and 2022 into the company. OMERS bought a 19.4% stake in Azure for $219 million from International Finance Corporation, the private-sector investment arm of the World Bank Group.
VCCircle first reported in April about how Azure had delayed its filings as it continued to face headwinds and its stock price continued to plummet from a high of just under $48.4 per share in January 2021.
The latest decision by the NYSE came even as SR Batliboi & Co, an EY Global affiliate, resigned as Azure’s auditor just days before the mandated deadline for filing.
The company said Thursday it had appointed ASA Associates LLP to audit its US consolidated financial statements for the year through March 2022. It also said Sunil Gupta joined as the CEO on July 10, replacing the acting CEO Rupesh Agarwal. Azure previously appointed Sugata Sircar as the Group Chief Financial Officer in May 2023.
Earlier this year, credit ratings agency Fitch Ratings downgraded group company Azure Power Energy Ltd’s US dollar bond to ‘BB’ from ‘BB+’ and Azure Solar Power Energy Pvt Ltd’s US dollar bond to ‘BB-’ from ‘BB’. “All ratings remain on Rating Watch Negative,” Fitch said in a January report.
Both these downgrades primarily have one thing to blame—Azure's corporate mis-governance.
The company has also been fighting a class action suit in the US after allegations of “potential procedural irregularities” and “misconduct by certain employees” at a plant run by its subsidiary surfaced.
On August 29, 2022, Azure’s stock lost 44% of its value after it publicly disclosed that it was probing a whistleblower complaint in this regard.
Azure also made another startling announcement around the same time. The company said that its chief executive officer Harsh Shah was demitting office less than two months in office, which he had assumed in July 2022.
The following month, in August 2022, Shah was replaced by the company’s chief strategy and commercial officer Rupesh Agarwal as acting CEO.
The first time the company’s travails came to light was when its founder Inderpreet Wadhwa quit the company as CEO and chairman and as a member of its board of directors in May 2019.
Wadhwa’s successor CEO, Ranjit Gupta, too, did not last long and quit along with chief operating officer Murali Subramanian in April last year. Then, Gupta’s successor Shah resigned within just two months of taking office.
The steep share price drop in August 2022 led to a class action lawsuit investigation in California state as retail shareholders said their investments went up in smoke.