Adani Group repays $902m share-backed financing ahead of schedule

Embattled Indian conglomerate aims to ease investor concerns after losing billions in market value following accusations of fraud made by US short seller

Adani Group said it aims to repay all share-backed financing before March 31, 2023. Reuters

India's embattled Adani Group has repaid around $902 million worth of share-backed financing to local and international banks ahead of schedule as it seeks to allay investor concerns after a short-seller report accused it of accounting fraud.

The repayment was paid ahead of its latest maturity in April 2025, the conglomerate said on its website on Tuesday.

It was made “in continuation of promoters’ commitment to reduce the overall promoter leverage backed by Adani-listed company shares”, the company said.

The term promoters refers to shareholders involved in setting up and funding a company.

Following the repayment, the promoters will release 155 million shares, or 11.8 per cent, of their holding in Adani Ports and Special Economic Zone, 31 million shares (4 per cent) in Adani Enterprises, 36 million shares (4.5 per cent) in Adani Transmission and 11 million shares (1.2 per cent) in Adani Green Energy.

The company's total early repayment of share-backed financing is now about $2.02 billion, “which is consistent with promoters’ commitment to prepay all share backed financing before March 31, 2023”, it said.

Billionaire Gautam Adani's conglomerate, which has interests ranging from ports to power, has lost billions in market value following US short-seller Hindenburg Research's scathing report on January 24.

Hindenburg Research accused companies controlled by Mr Adani, at the time Asia's richest person, of being involved in “brazen” market manipulation and accounting fraud.

The company and Mr Adani have both denied any wrongdoing.

The net worth of Mr Adani, which had reached about $150 billion, has also plummeted, and was at $52.1 billion as of Tuesday, according to the Bloomberg Billionaires Index.

However, Adani Group shares recovered last week after US boutique investment firm GQG Partners said it bought shares worth $1.87 billion in four Adani Group companies, marking the first significant investment in the company since the scandal began.

The group has also been holding roadshows and met fixed-income investors in Singapore and Hong Kong last week.

It is also planning to meet investors in Dubai, London and the US between March 7 and March 15, to try to reassure them of its financial position, Bloomberg reported, citing sources.

Analysts have also said that the effects from the Adani debacle may be short-lived and would not affect the wider stock market.

The exposure of Indian banks to the conglomerate is “insufficient in itself” to present substantial risk to lenders, Fitch Ratings previously said.