Adani Group pledges more shares: SBICap Trustee
Adani Group has pledged more shares of its companies as security for loans taken by its flagship firm, according to notices sent by SBICap Trustee to stock exchanges. The trustee said an additional 0.99% of shares in Adani Green Energy and 0.76% in Adani Transmission were pledged “for the benefits of the lenders” of Adani Enterprises. However, no details about the loans taken by Adani Enterprises for which the pledge was created were provided. With the latest pledge, the total shares in Adani Green Energy that were encumbered with SBICap stood at 2%, while in the case of Adani Transmission, it was 1.32%.
The pledge was created the day after the Adani group announced that it had repaid INR 7,374 crore ($981m) loans that were taken pledging shares in four group companies to allay investor concerns over leverage and debt. This repayment released pledge on 31 million shares, or 4% stake, of promoters in Adani Enterprises, 155 million shares (11.8% stake) in Adani Ports & Special Economic Zone, 36 million shares (4.5% of promoters’ holding) in Adani Transmission, and over 11 million shares or 1.2% of promoters’ holding in Adani Green Energy.
Founder chairman Gautam Adani and his brother Rajesh, on behalf of SB Adani Family Trust, had announced the sale of shares in Adani Enterprises, Adani Ports and Special Economic Zone, Adani Transmission, and Adani Green Energy in March 2021. The sale helped the group turn the narrative around since US short seller Hindenburg Research released a damning report in January 2021. The 10 listed Adani Group companies, which together had lost about $18.6bn in market value following the report, have seen stock prices rise in successive trading sessions ever since.
The group has denied all allegations by Hindenburg Research, calling them “malicious”, “baseless” and a “calculated attack on India”. Adani Group is hoping to choose slow and steady growth over the breakneck, mostly debt-fuelled, expansion spree of recent years. The group has already scrapped a $930m coal plant purchase, decided not to bid for a stake in state-backed energy trading firm PTC, reined in expenses, repaid some debt, and promised to repay more. Adani Group’s gross debt has doubled in the last four years, with almost $2bn worth of foreign-currency bonds coming up for repayment in 2024. According to a presentation made to investors last month, the group’s gross debt has grown from INR 1.11 lakh crore in 2019 to INR 2.21 lakh crore in 2023. After including cash, the net debt was INR 1.89 lakh crore in 2023.