Adani-Hindenburg Case: Group Took Steps To Build Investor Confidence, Says Supreme Court Panel
Empirical data shows the retail investor exposure to Adani stocks increased multifold after Jan. 24, says the committee.
The Adani Group has taken necessary steps to comfort retail investors after the volatility caused by Hindenburg Research's report, according to the report of the Supreme Court-appointed expert committee.
"This is evident from the empirical data that shows the retail investment exposure to Adani stocks has increased multifold after Jan. 24," the committee said in the report. BQ Prime has reviewed a copy of the report.
The mitigating measures taken by the Adani Group has helped in building confidence in its stocks, which are stable now, it said. "The Adani Group pared down the debt secured by encumbrances on their shareholding, infusion of fresh investment into Adani stocks by way of investment of nearly $2 billion by a private equity investor and the likes is what built confidence in the stocks."
Here's how the Adani Group has pared debt so far:
The group repaid close to $3 billion worth of loans, released pledge shares and repaid bondholders in the last four months to shore up confidence after a short-seller attack.
The promoters substantially reduced gross pledge by paying debt in the last three years. They repaid more this year after the Hindenburg report.
The company fully prepaid margin-linked share-backed financing worth $2.15 billion, pertaining to its acquisition of Ambuja Cements Ltd., before the committed deadline of March 2023.
The Adani Group also prepaid share-backed financing worth Rs 7,374 crore, ahead of the latest maturity in April 2025 to various International banks and Indian financial institutions. That led to the release of promoter pledge in four group companies—Adani Ports and Special Economic Zone Ltd., Adani Enterprises Ltd., Adani Transmission Ltd. and Adani Green Energy Ltd.
The group debt stands at Rs 2.27 lakh crore versus gross assets worth Rs 3.91 lakh crore, as on March 31. Consistent repayment of debt has helped deleverage the Adani Group, with its net debt-to-Ebitda ratio coming down from 7.6 times in FY13 to 3.2 times in FY23.
International and domestic rating agencies, too, have affirmed ratings across the portfolio, signifying high quality underlying credit quality. The group has consistently diversified its long-term debt portfolio, reducing its exposure to banks by tapping other sources of capital.
Most global banks including MUFG, SMBC, MIZUHO, Standard Chartered, Barclays, DB and consortium lender banks have reaffirmed confidence in Adani Group.
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