Adani flagship shelves $122mn bond plan after market rout

Adani Enterprises Ltd has shelved a plan to raise as much as 10bn rupees ($122mn) via its first-ever public sale of bonds following a market rout, according to people familiar with the matter.
The flagship firm of Indian billionaire Gautam Adani’s empire had planned the public note issuance for January, working with Edelweiss Financial Services Ltd, AK Capital, JM Financial, and Trust Capital, Bloomberg had reported in December. But activity has now stopped, according to the people, who asked not to be identified because the matter is private.
The development is the latest in a sudden reversal of fortune for the conglomerate, after US-based shortseller Hindenburg Research late last month accused it of stock manipulation and accounting fraud. While the group has vigorously denied the allegations, its stock and bond prices have slumped.
The turmoil last week forced Adani Enterprises to abruptly pull a record 200bn-rupee follow-on public offer of shares, and marks a stunning contrast to just a few months ago when the conglomerate was looking to raise funds to finance expansion plans. In a sign of just how prohibitively expensive any attempted debt financing for group firms could now be, the yield on an Adani Green Energy Ltd bond spiralled over 36% last week.
Edelweiss declined to comment, while the other three financial firms that were on the planned Adani Enterprises note offering didn’t immediately respond to requests for comment. There was no response from a spokesperson for Adani Group to an emailed request for comment.
The market rout will likely reduce the group’s ability to raise money for capital expenditure projects or to refinance debt over the next year or two, according to Moody’s Investors Service.


Indian watchdog tells investors markets stable despite Adani rout


India’s market regulator moved to calm investor concerns yesterday, saying that its financial markets remain stable and continue to function in a transparent and efficient manner, despite recent dramatic stock falls in Adani Group companies, reports Reuters.
Shares in Adani Group firms, controlled by billionaire tycoon Gautam Adani, have dropped by $100bn, or half their market value, since US-based short-seller Hindenburg Research made allegations of stock manipulation and unsustainable debt.
“During the past week, unusual price movement in the stocks of a business conglomerate has been observed,” the Securities and Exchange Board of India (SEBI) said in a statement, without naming any specific entity.
The Adani Group denies all Hindenburg’s allegations, but the fall in the value of its stocks led it to call off earlier this week a $2.5bn share sale by Adani Enterprises.
Mechanisms were in place to address excessive volatility in specific stocks, SEBI said, adding these were automatically triggered under certain conditions of stock price volatility.
Any matters related to specific entities will be examined and appropriate action will be taken, the regulator added.
Reuters earlier reported that SEBI was examining the recent crash in the Adani Group’s shares and looking into any possible irregularities. The comments follow a similar assurance from the central bank which said that the banking sector remained stable.
Shares of the group’s flagship company stabilised somewhat on Friday and closed 1.4% higher, after earlier slumping 35% to hit their lowest level since March 2021.
That low took its losses to nearly $33.6bn since last week, a 70% fall.
Earlier on Saturday, India’s Finance Secretary TV Somanathan said that from a macroeconomic perspective, the Adani issue is a “storm in a tea cup”, while Finance Minister Nirmala Sitharaman said regulators are independent and will take their own action.