Adani Enterprises Ltd has shelved a plan to raise as much as $122 million through its first-ever public sale of bonds following a market rout.
The flagship of Gautam Adani’s empire had planned the public note issuance for January working with Edelweiss Financial Services Ltd, AK Capital, JM Financial, and Trust Capital.
The allegations
The news is the latest in a sudden reversal of fortune for the conglomerate, after US-based short seller Hindenburg Research late last month accused it of stock manipulation and accounting fraud.
The group has vigorously denied the allegations to no avail since its stock and bond prices have slumped.
Change in fortunes
The turmoil last week forced Adani Enterprises to abruptly pull a record 200 billion-rupee follow-on public offer of shares.
This also marks a stunning contrast to just a few months ago when the conglomerate was looking to raise funds for expansion.
36% spiral in yield
In a sign of just how prohibitively expensive any attempted debt financing for group firms could now be, the yield on an Adani Green Energy Ltd bond spiraled over 36% last week.
None of the companies or parties involved offered any comment.
The market rout means that the group’s ability to raise money for capital expenditure projects or to refinance debt over the next year or two will be weakened, as per Moody’s Investors Service.
Bleeding continues
There is an update to be made.
The Adani group lost over ₹9 trillion crore or $100 bn in market value following Hindenburg Research’s accusations.
As a result, the Adani Group has seen a steep fall in the share prices of group firms, charges it has denied saying it complies with all laws and disclosure requirements.
Now, despite this the conglomerate on Monday announced that promoters will pre-pay USD 1,114 million (1.1 billion) for the release of pledged shares of its firms ahead of the maturity in September 2024.
Pre-payment for share release
The step, the group said, was taken “in light of the recent market volatility”.
These shares belong to Adani Ports & Special Economic Zones, Adani Green Energy and Adani Transmission.
“This is in continuation of promoters’ assurance to pre-pay all share-backed financing,” it said.
Currently, the group’s debt position has come under question and many who have invested in its stocks are voicing concerns over how this will impact their wealth.
Protected by PM?
It should be noted that while Adani Group has been met with questions and uproar over the recent news, in one place the issue has gone undebated: parliament.
The opposition has demanded an opportunity to quiz the government regarding the happenings over at the Group which incidentally has been a longtime ally of Prime Minister Narendra Modi.
