JANUARY 25, 2023
New Delhi: Adani Group companies’ share prices went sliding after Hindenburg Research said on Wednesday it holds short positions in the Indian conglomerate through US-traded bonds and non-Indian-traded derivative instruments.
According to the short-seller, seven Adani-listed companies have an 85 per cent downside on a fundamental basis due to sky-high valuations, and “key listed Adani companies have also taken on substantial debt” which has “put the entire group on precarious financial footing”.
Adani Group, controlled by world’s third richest man Gautam Adani has long faced concerns about elevated debt. But the group has repeatedly dismissed debt concerns. Earlier this month, Jugeshinder Singh, Chief Financial Officer of Adani conglomerate told, “Nobody has raised debt concerns to us. No single investor has.”
The timing of Hindenburg’s report could come as another hindrance for the group as Adani Enterprises is planning to raise $2.5 billion through a follow-on public offering (FPO) this week.
Shares in Adani Ports And Special Economic Zone (APSE.NS) slid 7.25 per cent on Wednesday, while Adani Enterprises, the group’s flagship company, dropped 3.7 per cent. Shares in Adani Enterprises surged 125% in 2022, while other group companies, including power and gas units, rose more than 100%.
Adani Group’s total gross debt in the financial year ending March 31, 2022, rose 40 per cent to 2.2 trillion rupees. CreditSights, part of the Fitch Group, described the group last September as “overleveraged” and said it had “concerns” over its debt. While the report later corrected some calculation errors, CreditSights said it maintained its concerns over leverage.
Adani Enterprises FPO will be opening on 27 January 2023 and will remain open to subscribers till 31 January 2023. Adani Enterprises FPO price has been fixed at Rs 3,112 to Rs 3,276.