The first course of action for Adani Group now lies in raising credibility, and meeting debt obligations. Ever since the Hindenburg Report, the group has been also focused on cutting its debt in order to assuage investor concerns.
Shares of five Adani companies namely Adani Enterprises Ltd, Adani Green, Adani Power, Adani Transmission and Adani Total Gas were on focus after the group announced that it had completed the entire prepayment of margin-linked share-backed financing ahead of the committee deadline of March 31, 2023. The amount equalling $2.15 billion is one of the slew of initiatives taken by the group as part of debt reduction strategies to restore investor confidence.
Share prices rise
On Thursday, March 13 the shares of Adani Power opened at 211. 70 from the Friday's close of 204.90. The stock value of flagship Adani Enterprises also picked up and opened at 1902 from Friday's close of 1896.45. The scrip of Adani Green touched a high of 716.80 from March 10 closing value of 682.70. Keeping with the rising trend, stock prices of Adani Transmission also rose and opened at 949.65 from March 10 closing value of 904.45. Adani Total Gas also became a major gainer by trading at 997.05 by noon on Monday from the previous close of 949.60.
Cruel ironies of time
It's the same group that was not long ago defined by two key words; acquisition and expansion. Last year, in one of the headline-grabbing $10.5 billion deal, Adani group picked up Holcim Group's entire stake in two Indian firms—Ambuja Cements and ACC. Holcim sold its 63.19 per cent stake in Ambuja Cements Ltd and 54.53 per cent in ACC to Adani Group. By acquiring the two major Indian cement players, the group became the second largest cement player in the country.
Lately, there have been media reports of the group contemplating selling 4-5 per cent stake in Ambuja Cements to raise funds. A Financial Times report said that on Thursday Adani made a formal request to international lenders to sell 4-5 per cent stake in Ambuja Cements for about $450 million.
Meanwhile, in order to increase equity contribution, the group has also prepaid the $500 million facility availed off for financing the Ambuja acquisition. The promoters, accordingly, have infused $2.6 billion out of the total acquisition value of $6.6 billion for Ambuja Cements and ACC.
The group is likely to make an announcement on the same, anytime this week, with GQG Partners being one of the most probable buyers, reported Businessline quoting sources internal to the matter. Notably, GQG was also the first major investor in Adani Group after Hindenburg's explosive report came out. It purchased shares in Adani Enterprises, Adani Ports and Adani Transmission and Adani Green Energy.
Announcements on loan repayments work
News reports of the group being able to slowly meet its debt obligations and announcements on loan repayments, the shares of the Adani Group recovered marginally. As a result, the wealth of Gautam Adani upped to $56.17 billion, from hitting the low of $37.7 billion on February 27. Gautam Adani currently ranks at 21 on the Bloomberg Billionaire Index after falling to 30th spot earlier.
Meanwhile, the investigation, ordered by the Supreme Court of India to market regulator SEBI to look into accounting frauds and stock manipulation, is still underway.
