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Adani Group to Pre-Pay $1,114 Million for Release of Pledged Shares

In a significant move, Adani Group announced on Monday that its promoters will pre-pay $1,114 million for the release of pledged shares of its firms ahead of the maturity in September 2024. This move comes in light of the recent allegations of fraud and stock manipulation against the Adani Group, which resulted in a steep fall in the share prices of group firms.

Picture: Kumaon Jagran
Gautam Adani

According to a statement released by the company, the pre-payment will lead to the release of 168.27 million shares of Adani Ports & Special Economic Zones, representing 12% of the promoter's holding. In the case of Adani Green Energy, 27.56 million shares, representing 3% of the promoter's holding, will be released, while 11.77 million shares of Adani Transmission, representing 1.4% of the promoter's holding, will be freed.

The statement said, "This is in continuation of the promoter's assurance to pre-pay all share-backed financing. In light of the recent market volatility and in continuation of the promoter's commitment to reduce the overall promoter leverage backed by Adani listed companies shares, we are pleased to inform that the promoters have posted the amounts to pre-pay USD 1,114 million ahead of its maturity of September 2024."

The pre-payment of the pledged shares is a clear indication of the promoter's commitment to reducing the overall promoter leverage backed by Adani listed companies shares and to provide stability to the market amid recent market volatility. The company has assured that it will continue to take all necessary steps to maintain the stability and growth of its firms.

Picture: Kumaon Jagran

In response to the recent allegations of fraud and stock manipulation made by short-seller Hindenburg Research, the Adani Group has published a 413-page rebuttal denying all claims made by the US company. Hindenburg, which has stated that it could profit from the fall in Adani company shares, accuses the conglomerate of a "brazen stock manipulation and accounting fraud scheme" that has inflated the net worth of its billionaire chairman. The report also alleges substantial debt and a high turnover of CFOs at Adani Enterprises, among other things.

Adani, however, firmly denies all of the allegations made by Hindenburg and states that the amount of borrowed money its companies use is in line with industry benchmarks, and that any dealings with related parties have been properly accounted for. The conglomerate also says that the financial officers referred to by Hindenburg are still working for the organization in different roles, and that the audit committees of the listed companies are composed entirely of independent directors.

In a statement, Adani described the report as a "calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India". The group's shares have taken a hit following Hindenburg's allegations, with the value of seven listed Adani companies dropping significantly on the Indian stock exchanges.

Hindenburg, on the other hand, stands by its report and says that it is the result of a two-year investigation that included site visits in several countries. The US company has also stated that it will continue transacting after the publication of its report and that it could be "long, short or neutral".

This ongoing dispute between Adani and Hindenburg has caused quite a stir in the financial world and is a clear example of the importance of due diligence and verifying the accuracy of information before making investment decisions.

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