Billionaire Gautam Adani-led Adani Group has repaid loans worth $2.65 billion to complete a prepayment programme to cut overall leverage, a move which is being seen as an attempt to boost investors’ confidence in the group companies post a short seller report. Boosted by the development, shares of Adani group companies opened mostly higher on Tuesday and rose up to 4%.
In a credit note issued on Monday, Adani Group said it has made a full prepayment of $2.15 billion of loans that were taken by pledging shares in the group's listed firms and another $700 million debt taken for the acquisition of Ambuja Cement.
"The prepayment was done along with interest payment of $203 million," the Adani Group said in a credit update.
The Ahmadabad-based conglomerate in its credit update highlighted the portfolio's combined net debt to EBITDA ratio has decreased from 3.81 in FY22 to 3.27 in FY23, and run rate EBITDA jumped to ₹66,566 crore in FY23 compared to ₹50,706 crore in FY22. The gross asset or net debt cover at the portfolio combined level improved to 2.26x in FY23 from 1.98x FY22.
Reacting to the credit report, most of the listed Adani group entities were trading in the green zone in early trade. Out of 10, seven stocks were trading higher, barring NDTV, Adani Total Gas, and Adani Transmission. The flagship company, Adani Enterprises was up over 7%, while Ambuja Cement was the top gainer by rising 3.6%.
Among others, ACC, Adani Green Energy, Adani Ports & SEZ, Adani Power, and Adani Wilmar were up in the range of 0.5% to 1%.
Bucking the trend, Adani Transmission was down nearly 2%, while NDTV fell over 1%. Adani Total Gas was down marginally by 0.5%.
Meanwhile, the BSE benchmark Sensex was trading lower by 98 points at 62,690 levels.
Last month, veteran investor Rajiv Jain-led GQG Partners raised its stake in Adani Group by about 10%, valued at around $3.5 billion. The American equity investment firm also proposed to participate in the group’s future fundraising activities, terming it as "the best infrastructure assets available in India".
In March this year, Jain, the co-founder and chairman of GQG Partners, acquired minority stakes in four of the listed Adani Group companies for ₹15,446 crore. Listed on the Australian Stock Exchange, GQG Partners had acquired stakes in flagship firm Adani Enterprises Limited (AEL), Adani Ports and Special Economic Zone Limited (APSEZ), Adani Green Energy Limited (AGEL), and Adani Transmission (ATL).
As per the data available on the BSE, GQG brought a 3.4% stake in Adani Enterprises for about ₹5,460 crore, 4.1% in Adani Ports for ₹5,282 crore, 2.5% in Adani Transmission for ₹1,898 crore, and a 3.5% shares in Adani Green Energy for ₹2,806 crore through a series of secondary block trade transactions.
The investment by GQG was the first major capital infusion in Adani Group since the U.S.-based short-seller Hindenburg Research’s critical report on the conglomerate came out on January 24, 2023. The report triggered sell-off in group shares resulting in a huge market loss for most of the listed entities.
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