Adani-Hindenburg fallout: How much debt has Adani Group repaid since Jan 2023

Amid fallout from a US short seller’s scathing report, Adani Group has been trying to boost investor confidence by prepaying its debt, the latest being Adani Ports prepaying Rs 1,000-crore short-term debt. The Adani Group’s financial health has been under intense scanner after it witnessed massive stock selloffs since the Hindenburg Research released its report accusing the group of brazen stock manipulation and accounting fraud schemes over the course of decades. 
The group, since January 24, 2023, the day when Hindenburg published its report, has prepaid $1.114 billion or Rs 9,200 crore of loans taken against pledged shares as part of a move to prepay all share-backed financing.  

In addition, Adani Ports and Special Economic Zone (APSEZ) paid SBI Mutual Funds a Rs 1,000 crore loan — in the form of a commercial paper (CP) – on Monday.  

Group chairman Gautam Adani has huge repayment obligations worth more than $2 billion coming up between January 2023 and March 2024. Till last week, the group had an outstanding net debt of $24.1 billion as of September 30. The eight group companies are Adani Enterprises Ltd, Adani Ports and Special Economic Zone Ltd, Adani Green Energy Ltd, Adani Transmission Ltd, Adani Total Gas Ltd (ATGL), Adani Power Ltd, Ambuja Cements Ltd and ACC Ltd. 

The conglomerate has been using its cash balance and funds generated from business operations to pay its short-term debt. The loan repayment has been mapped as a comeback strategy to retain investors’ confidence and avoid any further damage to the group’s image.  

The group has claimed that the companies have enough cash reserves to pay debt obligations and there is no immediate major debt maturity in the near and medium term that poses refinancing risk. In its Q3 results, the group declared that its cash reserve rose by 6.4 per cent to Rs 31,646 crore at the end of December 2022 vis-a-vis Q2 2022-23. 

Also watch: Gautam Adani slips to 25th spot on global rich list; loses $50 billion in net worth

Loan prepaid as of now 

1.    Adani Ports and Special Economic Zone 

On February 20, Adani Ports and Special Economic Zone (APSEZ) paid SBI Mutual Funds a Rs 1,000- crore loan — in the form of a commercial paper (CP). 

The company will also prepay a short-term debt of Rs 1,000 crore of commercial papers due next month.  

“This part prepayment is from the existing cash balance and funds generated from the business operations,” an APSEZ spokesperson said. “This underscores the confidence which the market has placed on the prudent capital and liquidity management plan for the group.” 

Earlier, Adani Ports had declared that it would try to repay a debt of nearly Rs 5,000 crore in the year starting April, in a bid to improve its net debt to earnings before interest, taxes, depreciation, and amortisation ratio to about 2.5 times from just over 3 times currently. 

2.    Adani Enterprises Ltd 

Adani Enterprises has commercial papers of around Rs 1,500 crore due to mature over February-March and another Rs 2,000 crore that will be up for redemption from April-January 2024. These are likely to be settled when they mature. 

3.    Adani Transmission Ltd, Adani Green Energy Ltd 

On February 6, the group prepaid loans worth $1.11 billion and got the pledged shares released ahead of the maturity in September 2024, a statement released by the company stated. These companies were Adani Transmission Ltd, Adani Green Energy Ltd, and Adani Ports. 

With the pre-payment, 168.27 million shares of Adani Ports & Special Economic Zones representing 12 per cent of the promoter's holding will be released. 

For Adani Green, 27.56 million shares representing 3 per cent of the promoter's holding will be released. 

Besides, 11.77 million shares of Adani Transmission representing 1.4 per cent of the promoter's holding will be freed. 

What lies ahead 

As per the Bloomberg News update, the Adani Group has plans to prepay a $500 million loan due next month to a group of banks that includes Barclays, Standard Chartered, and Deutsche Bank. The group reportedly continues to speak with global bond investors to raise funds to pay off $500 million of overseas loans that are backed by the collateral of promoter shares in various group companies. 

According to Bloomberg data, the group managed to generate $8 billion from international bond buyers in recent years and has also got loans from global banks. Rating agencies, Moody's and S&P, have also revised their outlook for some of the companies under the Adani Group, such as Adani Green Energy Ltd. and Adani Ports & Special Economic Zone Ltd.