Adani Group eyes raising $1.8B from India bond sales

The Adani Group plans to raise ₹150 billion in FY 2023-24 by entering India's bond market, seeking to regain investor trust after facing damaging allegations. Despite the setback, the conglomerate denies wrongdoing and successfully raised ₹12.5 billion through bond sales earlier. 

The group also engages with international banks to refinance debt and secure funds for a significant solar project. Adani's resilience in navigating through the allegations and focus on expansion demonstrates their determination to move forward and drive growth.

Adani Group's Rebound Strategy

The Adani Group, a major Indian business conglomerate led by Gautam Adani, is gearing up to raise ₹150 billion ($1.8 billion) in local-currency bonds this financial year. The move comes as the group aims to restore investor confidence after facing damaging allegations earlier this year by the US-based short seller, Hindenburg Research. 

The accusations caused disruptions in the group's stocks and bonds, prompting the conglomerate to take measures to address the situation.

Sources familiar with the matter revealed that the Adani Group is considering issuing smaller lots of bonds, ranging from ₹5 billion to ₹10 billion each, to meet the capital needs of its various companies. 

Entities like Adani Ports and Special Economic Zone Ltd., Adani Electricity Mumbai Ltd., Mumbai International Airport Ltd., Navi Mumbai International Airport Ltd., and the flagship company, Adani Enterprises Ltd., are among those potentially participating in the bond issuance. 

The plan is still under discussion and expected to gain momentum within two months. There are indications that the fundraising amount might even double its initial target, demonstrating the group's determination to secure the necessary capital.

The primary aim of these bond issuances is to rebuild investor trust after the damaging allegations earlier this year. Hindenburg Research's report accused the Adani Group of corporate wrongdoing over a long period, causing disruptions to the group's financial instruments. 

The Adani Group has strongly denied the allegations, showing its resilience in the face of challenges.

In a recent successful effort to address its financing needs amid the controversy, Adani Enterprises raised ₹12.5 billion through the issuance of Indian bonds, highlighting its commitment to overcoming challenges and maintaining its prominent position in India's business landscape.

Adani Group in Talks with International Banks for Refinancing Debt

In addition to the domestic bond market plans, the Adani Group is in discussions with well-known international banks, including Barclays, Deutsche Bank, and Standard Chartered. 

The group aims to secure a loan of approximately $600 million to $750 million to refinance debt taken on during the acquisition of Ambuja Cements Ltd. This strategic move aims to strengthen the group's financial structure and position in the market.

Additionally, Adani New Industries Ltd., a subsidiary of the conglomerate, has successfully obtained $394 million via a trade finance facility from Barclays and Deutsche Bank. The funds will be directed towards a notable solar module project, showcasing the group's commitment to sustainability and green initiatives.

As the Adani Group continues to work on its funding strategies, industry analysts and investors will closely observe how these developments unfold. The group's ability to raise capital successfully, despite the challenges it faced, will serve as a test of its resilience and credibility as one of India's most influential conglomerates.

Adani Group vs. Hindenburg Research: The Battle of Allegations

Hindenburg Research, a short-selling research firm, published a report on March 8, 2023, alleging that Adani Group, an Indian conglomerate, had engaged in "accounting fraud and greenwashing." The report claimed that Adani Group had overstated the profitability of its coal mining operations and had misled investors about its environmental credentials.

Adani Group denied the allegations made by Hindenburg Research, calling them "false and misleading." The group said that it had "a strong track record of corporate governance and environmental sustainability."

The Indian government said that it was "monitoring" the situation involving Adani Group and Hindenburg Research. The government said that it would take "appropriate action" if there was any evidence of wrongdoing.

The Bombay Stock Exchange (BSE) said that it had asked Adani Group to provide clarifications on the allegations made by Hindenburg Research. The BSE said that it would take "necessary action" if there was any evidence of wrongdoing.

The allegations made by Hindenburg Research have had a significant impact on the share price of Adani Group companies.

It is still too early to say what the long-term impact of the allegations will be. However, the situation has raised concerns about the corporate governance practices of the Adani Group and the transparency of the Indian stock market.

In addition to the recent news, Hindenburg Research has also published reports alleging that Adani Group has ties to the Chinese government and that the group has engaged in insider trading. Adani Group has denied these allegations as well.

The case between Adani Group and Hindenburg Research is still ongoing. It remains to be seen whether the allegations made by Hindenburg Research will be proven to be true. However, the situation has already had a significant impact on Adani Group and the Indian stock market.