Embattled Adani Group repays share-backed financing worth Rs 7,374 crore

Embattled Adani Group on Tuesday said it has repaid share-based financing of Rs 7,374 crore (over USD 900 million) and will prepay all such remaining loans by the end of the month, as it looks to allay concerns over leverage and debt to win over investors.

The repayment will release pledge on shares of promoters in four group companies, it said in a statement, adding that together with repayments done earlier, the group has prepaid USD 2.016 billion of share-backed financing.

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 a January 24 report, US 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".

A month after the damning report by Hindenburg lopped off USD 135 billion in market value from Adani group's listed companies, the conglomerate is 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 Rs 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.

"In continuation of promoters' commitment to reduce the overall promoter leverage backed by Adani listed company shares, we would like to inform that we have prepaid share backed financing of Rs 7,374 crore ahead of its latest maturity in April 2025," the statement said.

As much as 31 million shares, or 4 per cent stake, of promoters in the group's flagship firm Adani Enterprises Ltd will be released from pledge while in Adani Ports & Special Economic Zone Ltd (APSEZ), promoters will release pledges on 155 million shares or an 11.8 per cent stake.

In the case of Adani Transmission Ltd, pledges over 36 million shares, representing 4.5 per cent of promoters' holding, will be released. Similarly, in Adani Green Energy Ltd, pledges over 11 million shares or 1.2 per cent of promoters' holding, will be released.

"Along with the repayments done earlier in the month of February, Adani has prepaid USD 2.016 billion of share backed financing, which is consistent with promoters' commitment to prepay all share backed financing before March 31, 2023," it said.

Adani Group's gross debt has doubled in the last four years. It has almost USD 2 billion worth of foreign-currency bonds coming up for repayment in 2024.

The conglomerate borrowed over USD 10 billion in foreign currency bonds between July 2015 and 2022 across group companies. Of this, USD 1.15 billion of bonds matured in 2020 and 2022.

The group's gross debt has grown from Rs 1.11 lakh crore in 2019 to Rs 2.21 lakh crore in 2023, according to a presentation made to investors last month.

After including cash, the net debt was Rs 1.89 lakh crore in 2023.