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Adani Group clears Rs 7,374-cr share-backed loan, vows to go debt-free this month

The repayment will release pledge on shares of promoters in four group companies

March 08, 2023 / 06:32 AM IST
Signage atop the Adani Group headquarters in Ahmedabad, India

Signage atop the Adani Group headquarters in Ahmedabad, India

The controversy-hit Adani Group has announced that it has prepaid the Rs 7,374-crore (more than $900 million) share-backed financing made by various international and domestic financial institutions, about two years ahead of its latest maturity date. The conglomerate pledged to prepay all remaining loans by the end of March.

The move is a part of the plan to cut overall promoter leverage backed by shares of Adani Group's listed companies, and repay all share-backed financing by March 31 this year, irrespective of later maturity dates. The repayment of the massive amount will allow the release of four of the Group’s listed shares - 155 million shares (11.8% of promoters’ holding) of Adani Ports & Special Economic Zone, 31 million shares (4%) of Adani Enterprises Limited, 36 million shares (4.5%) of Adani Transmission Limited, and 11 million shares (1.2%) of Adani Green Energy Limited.

"In continuation of promoters' commitment to reduce the overall promoter leverage backed by Adani listed company shares, we would like to inform that we have prepaid share backed financing of Rs 7,374 crore ahead of its latest maturity in April 2025," the statement said.

Together with the repayments made in February, Adani Group has until now prepaid about $2,106 million of share-backed financing.

Incidentally, the development comes right when the conglomerate starts its line-up of road shows in London, Dubai, and across the US. The road show tour might be an attempt to boost investors’ lost confidence, both at home and globally after the shares of 10 of the Group’s listed companies went on a downward spiral following a scathing report by US short-seller Hindenburg Research.

Also read: Adani Group's stocks rise after investor roadshow and reassurances of stability

If one can recall, Hindenburg Research reported "substantial" debt levels at Adani Group in January while claiming that the Group has engaged in accounting fraud and used offshore shell companies to push stock prices up.

The report gained the attention of investors especially because just a few months prior, in September 2022, CreditSights, a Fitch Group unit, claimed that the Group was "deeply overleveraged" as it used debt to expand its port-to-power empire.

Although Adani Group was quick to defend itself and refute the claims made by Hindenburg, about $135 billion of market value was wiped off in a month from Adani Group's listed companies.

The Group is now focusing on slow and steady recovery; a scrapped Rs 7,000 crore coal plant purchase, dropped bid for stake in energy trading firm PTC, and cost-cutting initiatives, stand witness.

Also read: How Hindenburg shorted the Adani stocks

Remarkably, in the last four years, Adani Group's gross debt has doubled, with almost $2 billion worth of foreign-currency bonds approaching repayment deadlines in 2024. The gross debt has ballooned from Rs 1.11 lakh crore in 2019 to Rs 2.21 lakh crore in 2023, according to a presentation made to investors last month.

The net debt after including cash stood at Rs 1.89 lakh crore in 2023.

Moneycontrol News
first published: Mar 7, 2023 04:57 pm