Adani group firms pledge shares for lenders to flagship company

Adani group

Three Adani group companies have pledged shares for lenders to the Indian conglomerate's flagship Adani Enterprises, which pulled a $2.5 billion share sale during a recent market rout, the debt trustee firm said.

Adani Ports and Special Economic Zone, Adani Transmission Ltd and Adani Green Energy Ltd pledged shares to SBICAP Trustee Co, the firm, a unit of India's biggest state lender, State Bank of India, said in a February 10 filing to the Bombay Stock Exchange.

The Adani group, controlled by billionaire Gautam Adani, has lost more than $100 billion in market value since January 24, when US short seller issued a scathing report on the apples-to-airports conglomerate.

Hindenburg Research accused the group of stock manipulation and improper use of offshore tax havens. The conglomerate has rejected the firm's findings and denied any wrongdoing.

Also Read: Moody's downgrades Adani Green outlook to negative from stable

India's market regulator, the Securities and Exchange Board of India, is investigating the Adani group's links to some of the investors in the conglomerate's aborted share sale, sources told Reuters on February 10.

"As part of the Standby LC facility of USD 300 mio, provided by SBI for Adani group's Carmichael project in Australia, there is an additional collateral by way of pledge of shares of 3 group companies. The required collateral coverage of 140 percent is reviewed as at the end of each month and any shortfall on account of MTM is required to be topped up. There have been a top up each in the months of June and July 2022 and the third such top up was done on February 8 2023 after a review as on 31st Jan 2023," a SBI spokesperson said in a note.

"Being the Security Trustee, SBI Cap Trustee Company, is required to file the same with SEBI and it is being complied with by them each time whenever there is a change in number of shares pledged."

"With this latest tranche, the percent of shares that is pledged towards this project, aggregates to 1.06 percent, 1.00 percent and 0.55 percent of equity shares of Adani Green, Adani Ports and Adani Transmission, respectively."

"It is clarified that such a share pledge is only as additional collateral security over and above the project assets and no additional finance is extended by SBI against such shares pledged", the spokesperson said.

(With inputs from Reuters)