More shares belonging to companies of the embattled Adani Group have been pledged as security for loans taken by the group's flagship firm, a trustee said. SBICap Trustee in notices to stock exchanges said that a further 0.99 per cent shares in Adani Green Energy Ltd were pledged "for the benefits of the lenders" of Adani Enterprises Ltd. An additional 0.76 per cent shares in Adani Transmission Ltd were also pledged to banks, the trustee said.
SBICap, which is a unit of State Bank of India (SBI), however did not give details of the loans taken by Adani Enterprises for which the pledge was created. 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 per cent. In the case of Adani Transmission, this came to 1.32 per cent.
The pledge was created a day after Adani Group on March 7 said it has repaid Rs 7,374 crore (over $900 million) loans that were taken pledging shares in four group companies in an attempt to allay investor concerns over leverage and debt.
Repayment of debt released pledge on 31 million shares, or 4 per cent stake, of promoters in Adani Enterprises Ltd, 155 million shares (11.8 per cent stake) in Adani Ports & Special Economic Zone Ltd (APSEZ), 36 million shares (4.5 per cent of promoters' holding) in Adani Transmission Ltd, and over 11 million shares or 1.2 per cent of promoters' holding in Adani Green Energy Ltd.
The repayment will release pledge on shares of promoters in four group companies, the group had said in a statement on March 7, adding that together with repayments done earlier, the group has prepaid $2.016 billion of share-backed financing.
While Adani group has not detailed the source of money for repayment of loans, these came within days of the promoters selling minority stakes in four of listed companies to US-based GQG Partners for Rs 15,446 crore. 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 US short seller Hindenburg Research released a damning report on January 24. The 10 listed Adani Group companies, which together had lost about USD 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, 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".
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 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.
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 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.