New Delhi: Adani Group Seeking to reassure investors on Monday that it has strong cash flows and its business plans are fully funded, as an Indian regulator confirmed it is investigating a material report by a short-seller. which has battered the shares of the group.
Led by billionaire businessman Gautam Adani, the conglomerate’s seven listed stocks have combined to lose nearly $120 billion in market value as US short-sellers find unfair use in offshore tax havens and stock manipulation, a January 24 report by Hindenburg Research reported. Use has been alleged, group has alleged disallowed.
The turmoil continued on Monday, extending losses in shares of listed companies.
Seeking to calm investors, the group said in a statement to Reuters that the balance sheets of each of its independent portfolio companies were “very healthy”, with its business plans “fully funded” with secured assets and strong cash. There was flow.
“We remain confident in the continued ability of our portfolio to deliver superior returns to shareholders,” Adani Group said in an emailed statement.
Bloomberg News reported Monday that the conglomerate has cut its revenue growth target in half and plans to reduce capital spending. A spokeswoman for the company told Reuters earlier in the day that the report was “baseless, speculative”, without elaborating.
The Adani crisis has sparked concerns of a financial crisis in India, protests in Parliament where lawmakers have demanded an inquiry, rating outlook downgrades of some Adani units and cast a shadow over the group’s plans to raise capital. Gautam Adani’s crown of Asia’s richest man has also been snatched away.
“Once the current market stabilises, each entity will review its capital market strategy,” the Adani Group statement said.
The Securities and Exchange Board of India (Sebi) is probing market moves, including examining trading patterns and any possible irregularities, in major company Adani Enterprises’ $2.5 billion share sale, which was canceled by the stock’s plunge to Adani Group. was forced to do. Reuters has previously reported.
SEBI confirmed the existence of the probe for the first time in a Supreme Court filing.
“SEBI is already examining the market movements along with the allegations made in the Hindenburg Report,” the regulator said in a filing seen by Reuters. ,
During a court hearing on Monday where the Supreme Court heard public interest litigations that raised concerns about huge losses to investors, Solicitor General of India Tushar Mehta, arguing on behalf of the government and SEBI, said that if the protection There was no objection if a panel was constituted to investigate. system for investors. The judges asked him to come back with the avoidance of such a panel, and set further hearings for Friday.
Two sources told Reuters on Monday that Sebi is set to brief federal finance ministry officials on February 15 about the probe into the stalled share sale. Sebi and the finance ministry did not immediately respond to Reuters requests for comment.
Last week, Moody’s downgraded the rating outlook for some Adani companies, while index provider MSCI said it would cut the weightings of some in its stock index.
On Monday, all the shares of Adani Group were under pressure. Adani Enterprises fell 7%, while Adani Total Gas, Adani Power and Adani Transmission declined 5% each.
Adani Total, a joint venture with France’s TotalEnergies, has lost 70% since the Hindenburg report, while Adani Enterprises is down 50%.
Since the release of the Hindenburg report, Adani Group has paid off some of its $25 billion debt and pledged to independently review short-seller claims, but its securities meltdown continues.
“The impact of management’s efforts to reassure investors will take at least three to six months to reflect in share prices. The price damage has been significant,” said Avinash Gorakshak, head of research at Profitmart Securities.
In Mumbai, around 100 political activists and activists of the opposition Communist Party of India marched, chanting anti-Adani slogans and carrying cartoon posters of Adani and Prime Minister Narendra Modi.
Opposition critics accuse the Modi government of giving undue favors to the Adani group. Both the government and Adani deny an overly close relationship.
Firoz Mithiborwala, one of the protesters, said, “The effect of our protest is visible as Adani’s shares continue to fall.”
In recent times, concerns have also arisen about the exposure of the Adani group to Indian and foreign lenders. In its rebuttal to Hindenburg’s allegations, the group pointed to its international banking ties as a sign of its strength.
Singapore’s DBS Group said on Monday that it had an exposure of S$1.3 billion ($976 million) to Adani group companies, of which S$1 billion was to finance its cement business. DBS said he was not concerned about his exposure to the group.
Led by billionaire businessman Gautam Adani, the conglomerate’s seven listed stocks have combined to lose nearly $120 billion in market value as US short-sellers find unfair use in offshore tax havens and stock manipulation, a January 24 report by Hindenburg Research reported. Use has been alleged, group has alleged disallowed.
The turmoil continued on Monday, extending losses in shares of listed companies.
Seeking to calm investors, the group said in a statement to Reuters that the balance sheets of each of its independent portfolio companies were “very healthy”, with its business plans “fully funded” with secured assets and strong cash. There was flow.
“We remain confident in the continued ability of our portfolio to deliver superior returns to shareholders,” Adani Group said in an emailed statement.
Bloomberg News reported Monday that the conglomerate has cut its revenue growth target in half and plans to reduce capital spending. A spokeswoman for the company told Reuters earlier in the day that the report was “baseless, speculative”, without elaborating.
The Adani crisis has sparked concerns of a financial crisis in India, protests in Parliament where lawmakers have demanded an inquiry, rating outlook downgrades of some Adani units and cast a shadow over the group’s plans to raise capital. Gautam Adani’s crown of Asia’s richest man has also been snatched away.
“Once the current market stabilises, each entity will review its capital market strategy,” the Adani Group statement said.
The Securities and Exchange Board of India (Sebi) is probing market moves, including examining trading patterns and any possible irregularities, in major company Adani Enterprises’ $2.5 billion share sale, which was canceled by the stock’s plunge to Adani Group. was forced to do. Reuters has previously reported.
SEBI confirmed the existence of the probe for the first time in a Supreme Court filing.
“SEBI is already examining the market movements along with the allegations made in the Hindenburg Report,” the regulator said in a filing seen by Reuters. ,
During a court hearing on Monday where the Supreme Court heard public interest litigations that raised concerns about huge losses to investors, Solicitor General of India Tushar Mehta, arguing on behalf of the government and SEBI, said that if the protection There was no objection if a panel was constituted to investigate. system for investors. The judges asked him to come back with the avoidance of such a panel, and set further hearings for Friday.
Two sources told Reuters on Monday that Sebi is set to brief federal finance ministry officials on February 15 about the probe into the stalled share sale. Sebi and the finance ministry did not immediately respond to Reuters requests for comment.
Last week, Moody’s downgraded the rating outlook for some Adani companies, while index provider MSCI said it would cut the weightings of some in its stock index.
On Monday, all the shares of Adani Group were under pressure. Adani Enterprises fell 7%, while Adani Total Gas, Adani Power and Adani Transmission declined 5% each.
Adani Total, a joint venture with France’s TotalEnergies, has lost 70% since the Hindenburg report, while Adani Enterprises is down 50%.
Since the release of the Hindenburg report, Adani Group has paid off some of its $25 billion debt and pledged to independently review short-seller claims, but its securities meltdown continues.
“The impact of management’s efforts to reassure investors will take at least three to six months to reflect in share prices. The price damage has been significant,” said Avinash Gorakshak, head of research at Profitmart Securities.
In Mumbai, around 100 political activists and activists of the opposition Communist Party of India marched, chanting anti-Adani slogans and carrying cartoon posters of Adani and Prime Minister Narendra Modi.
Opposition critics accuse the Modi government of giving undue favors to the Adani group. Both the government and Adani deny an overly close relationship.
Firoz Mithiborwala, one of the protesters, said, “The effect of our protest is visible as Adani’s shares continue to fall.”
In recent times, concerns have also arisen about the exposure of the Adani group to Indian and foreign lenders. In its rebuttal to Hindenburg’s allegations, the group pointed to its international banking ties as a sign of its strength.
Singapore’s DBS Group said on Monday that it had an exposure of S$1.3 billion ($976 million) to Adani group companies, of which S$1 billion was to finance its cement business. DBS said he was not concerned about his exposure to the group.