In continuation of its prepaying the finance, the Adani Group has completed full pre-payment of margin-linked share-backed financing aggregating to $2.15 billion before March 31. Additionally, the promoters have also prepaid the $500-million loan facility taken for financing the acquisition of Ambuja Cements Ltd.
In a statement, the Group said entire pre-payment programme of $2.65 billion has been completed within six weeks. “This is in line with promoters’ commitment to increase equity contribution, and promoters have now infused $2.6 billion, out of the total acquisition value of $6.6 billion for Ambuja and ACC,” it said.
“The entire prepayment programme of $2.65 billion has been completed within six weeks, which testifies the strong liquidity management and access to capital at sponsor level, supplementing the solid capital prudency adopted at all portfolio companies,” the statement said.
The Group began pre-payment after its stocks were battered on the bourses after the U.S. short-seller Hindenburg Research published a scathing report on the group’s business practices accusing it of stock manipulation and accounting fraud, allegations that the Group has denied. While the statement has not detailed the source of money for repayment, these came within days of the promoters selling minority stakes in four listed companies to U.S.-based GQG Partners for ₹15,446 crore.
The announcement comes within days of the group saying it has pre-paid ₹7,374 crore (about $902 billion) loans that were taken pledging shares in four group companies. This has now been scaled up to $2.15 billion.
This, it said, was in line with promoters' commitment to increase equity contribution and promoters have now infused $2.6 billion out of total acquisition value of $6.6 billion for Ambuja and ACC.
"The entire prepayment program of $2.65 billion has been completed within 6 weeks, which testifies the strong liquidity management and access to capital at sponsor level, supplementing the solid capital prudency adopted at all portfolio companies," the statement said.
The last announcement of prepayment of share-backed financing of ₹7,374 crore on March 7 was followed by more shares belonging to companies of the group being pledged as security for loans taken by the group's flagship firm.
On March 8, SBICap Trustee in notices to stock exchanges had stated that a further 0.99% shares in Adani Green Energy Ltd were pledged "for the benefits of the lenders" of Adani Enterprises Ltd. An additional 0.76% shares in Adani Transmission Ltd. were also pledged to banks, the trustee said.
With the latest pledge, the total shares in Adani Green Energy Ltd - the group's renewable energy company - that were encumbered with SBICap was 2%. In the case of Adani Transmission, this came to 1.32%.
The March 7 statement stated that the repayment of ₹7,374 crore will release pledges on shares of promoters in four group companies, and together with repayments done earlier, the group has prepaid $2.016 billion of share-backed financing.
Founder chairman Gautam Adani and his brother Rajesh on behalf of SB Adani Family Trust on March 2 announced sale of shares in flagship incubating firm Adani Enterprises Ltd (AEL), port company Adani Ports and Special Economic Zone Ltd (APSEZ), electricity transmitting firm Adani Transmission Ltd (AEL) and renewable energy firm Adani Green Energy Ltd (AGEL).
That sale helped the group turn the narrative building since the U.S. short-seller Hindenburg Research released a damning report on January 24.
The 10 listed Adani Group companies, which together had lost about $135 billion in market value following the report, have seen stock prices rise in successive trading sessions ever since.
In September last year, CreditSights, a Fitch Group unit, said the group was “deeply overleveraged” as it used debt to expand an empire centred on ports and coal mining to include airports, data centres and cement as well as green energy.
In the January 24 report, U.S. short-seller Hindenburg Research flagged “substantial” debt levels at the group while alleging accounting fraud and use of offshore shell companies to inflate stock prices.
The group has denied all Hindenburg allegations, calling them "malicious", "baseless" and a "calculated attack on India".
It is now hoping to claw back the narrative by choosing slow and steady growth over the breakneck, mostly debt-fuelled, expansion spree of recent years.
It has already scrapped a ₹7,000-crore coal plant purchase, decided not to bid for a stake in state-backed energy trading firm PTC, reined in expenses, repaid some debt and promised to repay more.
Adani Group's gross debt has doubled in the last four years. It has almost $2 billion worth of foreign-currency bonds coming up for repayment in 2024.
The group's gross debt has grown from ₹1.11 lakh crore in 2019 to ₹2.21 lakh crore in 2023, according to a presentation made to investors last month.
After including cash, the net debt was ₹1.89 lakh crore in 2023.