Adani Group prepays over Rs 7,000 crore worth share-backed loans

The Adani Group on Tuesday prepaid Rs 7,374 crore in equity-backed financing as part of its promoters' commitment to reduce overall leverage backed by the conglomerate's listed companies.

The development comes as the port-to-power conglomerate continues to focus on reducing debt to regain investor confidence - at home and globally - after a scathing report from US short-seller Hindenburg Research led to sharp market losses in 10 listed companies.

The Adani Group denied the allegations made by Hindenburg, but to no avail. The group then decided to prioritize a debt reduction strategy, especially those involving pledged shares. The group recently held fixed-income roadshows in Hong Kong and Singapore, where it reportedly reassured investors that it was well-positioned to service its loans. Adani Group also plans to hold another roadshow from March 7 to 15 in Dubai, London and the United States. The group said in a statement that the promoters of flagship company Adani Enterprises will release 31 million shares, representing a total stake of 4 percent.

Meanwhile, Adani Ports and Special Economic Zone will release 155 million shares or 11.8 percent stake. The promoters of Adani Green Energy and Adani Transmission will release 1.2 percent and 4.5 percent stakes in the respective companies. “Following the promoters' commitment to reduce the promoter's overall leverage backed by Adani Listed Company shares, we would like to inform that we have pre-paid €7,374 (US$902 million) equity-backed financing ahead of its final maturity in April. 2025,” Adani Group said in a statement.

It may be noted that Adani Group pre-paid loans worth USD 1.11 billion for the issue of pledged shares in February and the total repayment now stands at more than USD 2 billion. "Together with the repayments made earlier in the month of February, Adani has pre-paid USD 2,016 million of equity-backed financing, which is in line with the promoters' commitment to prepay all equity-backed financing by March 31, 2023," the group said. The fresh upfront payment is likely to further lift the Adani Group's share price on Wednesday after a strong rally that began last week.

Shares of Adani Group's 10 listed companies rallied strongly and rose in consecutive trading sessions following the group's assurance of debt repayment and Rs 15,000 crore investment in the four listed companies by US boutique investment firm GQG Partners.