The Adani Group has paid back at least $3 billion in the March quarter, lowering promoter-group pledges and settling bonds with three domestic mutual funds. Last month, the Adani group, led by billionaire Gautam Adani, had prepaid share-backed loans totalling Rs 7,374 crore ahead of their maturity in April 2025. The conglomerate has been aiming to reduce promoter leverage and address the concerns of investors and creditors since Hindenburg Research published its scathing report targeting the conglomerate. The group also repaid at least Rs 36.50 billion in total ($445.31 million) worth of commercial papers, a report in Mint stated on Tuesday.
“The proceeds from the $1.88 billion equity funding by GQG Partners and an additional $1 billion from promoter-group funding were used to release a substantial part of the promoters’ pledges and repay bonds early," a company official was quoted by Mint in its report.
The Adani Group, which lost a massive $145 billion erosion in market value after the Hindenburg Research report was published on January 24, has spent a whopping $2.54 billion to cut promoters’ pledges in four of its nine listed companies — Adani Enterprises Ltd, Adani Ports and SEZ Ltd, Adani Transmission Ltd, and Adani Green Energy Ltd.
Besides, the group reportedly repaid at least Rs 3,650 crore worth of commercial papers that were sold to SBI Mutual Fund ( Rs 2,750 crore), Aditya Birla Sun Life Mutual Fund ( Rs 500 crore) and HDFC Mutual Fund ( Rs 450 crore) in the January-March quarter, the Mint report said.
“This is possibly the largest amount ever spent in a single quarter by an Indian group to lower the promoter pledge," said a veteran investment banker.
Rising debt pile
In a separate report, it was stated that the embattled group’s debt burden rose about 21 per cent in the last one year and the proportion held by global banks rose to nearly 33 per cent. According to Bloomberg News, the power-to-ports conglomerate's borrowings of about 29 per cent were from global international banks at the end of the March quarter.
The report noted that the Adani Group’s shifting state of its finances and creditor mix clearly shows how billionaire Gautam Adani’s group has grown in the last few years and how well it is connected to countries like Australia and Israel.
Debt repayment
The Adani Group has been planning its move carefully and making moves to repay share pledges, bonds, and loans. In this regard, it has held roadshows in many cities with large investors and creditors to rebuild investor confidence.
The group has spent at least Rs 12,100 crore to reduce pledges in Adani Ports, Rs 4,000 crore in Adani Enterprises, Rs 3,762 crore in Adani Transmission, and Rs 1,145 crore in Adani Green Energy in the March quarter.
However, the group’s move to lower share-pledge levels and prepay debts has helped it check the free fall in the group’s stocks following the market rout post the publication of the Hindenburg report.
In Adani Power Ltd, the promoter pledge has slightly increased from 18.75 per cent to 18.85 per cent from December to March.
Promoter-group pledges in Ambuja Cements and ACC Ltd have been kept intact at 63 per cent and 6.64 per cent, respectively, since December 2022.
Rebuilding investors’ trust
Despite recent controversies following the Hindenburg report, including the withdrawal of India's biggest ever follow-on public offering, Sebi probe on Adani group's offshore deals, selling of stake by promoters in a few Adani companies, and slowing down of the pace of a few projects, among others, retail investors showed faith and upped stakes by over 100 basis points in a handful of group companies in the quarter gone by.
The Adani Group has attracted around 2.25 million new public shareholders, mostly retail and so-called high-net-worth individuals, who purchased shares worth at least $3.1 billion in the conglomerate during the March quarter.
Besides, state-run insurance giant LIC added 3.57 lakh shares in Adani Enterprises during the March quarter, data compiled from BSE and corporate database AceEquity showed. LIC has raised its stakes in Adani Green Energy, Adani Total Gas and two other Adani group stocks in the March quarter, while it had cut down stakes in two others, Ambuja Cements and Adani Ports & SEZ.
This was the seventh straight quarter when the insurance behemoth bought an additional stake in the Adani group firm. LIC held a 4.26 per cent stake in Adani Enterprises as on March 31, 2023, against 4.23 per cent as on December 31, 2022.
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