Gautam Adani defends a “robust” business with equity losses of $100 billion

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Indian billionaire Gautam Adani has broken his silence and defended his industrial empire despite the cancellation of a $2.4 billion stock sale in the wake of the short selling attack.

Adani Group share losses escalated to $100 billion on Thursday after the conglomerate’s flagship canceled a share issue, saying it “would not be morally correct” to proceed given the share deletion.

In a video address released shortly before the markets opened, founder Adani dismissed concerns about the group’s finances and said the decision not to proceed with fundraising for Adani Ventures “will have no impact on our current operations and future plans.”

He said the sale was held up to protect investors, who would have faced huge losses due to the company’s depreciation since they signed the deal.

“For me, my investor interest is the most important and everything [else] Al-Adani said in the address issued by the company. In order to insulate investors from potential losses, we have withdrawn [sale]. “

The group chairman said the company’s earnings and cash flow were “very strong” and that it had a “proven track record of meeting our debt obligations”.

“Our balance sheet is healthy and the assets are strong,” Al-Adani said. “Once the market is stable, we will review our capital market strategy.”

Shares of the Adani Group have now lost more than 8.4 trillion rupees ($102 billion) since short seller Hindenburg Research last week accused the group of using offshore entities in tax havens to inflate share prices of its listed companies, allowing it to take on more debt and ” Putting the entire group on a precarious financial footing. Adani Group has denied these allegations.

Shares of all 10 listed companies controlled by the conglomerate fell in early Mumbai trading on Thursday, although some of them later recovered. Adani Enterprises fell more than 18 percent, while Adani Transport and Adani Ports each fell 10 percent.

The decision on Wednesday to pull the sale of the shares and win back the investors came after shares in Adani Enterprises fell to 2,179.75 rupees ($27), well below the minimum deal price of 3,112 rupees.

Several Indian opposition MPs on Thursday demanded that parliament take time to discuss Hindenburg’s allegations. Adani Group’s investors include state-owned entities such as Life Insurance Corporation of India and State Bank of India.

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Adani made repeated efforts to reassure investors in the run-up to the stock sale, including issuing a 413-page response to the short seller’s allegations. He also enlisted some of India’s leading business tycoons to help get the show-up across the line.

Major investors, including Abu Dhabi International Holding Company and London-listed Jupiter Asset Management, had already committed to buying 30 percent of the offering before the public share sale began on Friday. On Monday, the International Humanitarian City pledged to invest $400 million in the sale.

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The sale prompted some financial groups, including Citigroup’s wealth unit, to stop accepting Adani Securities as collateral for margin loans, according to a person familiar with the situation.

The Adani Group on Thursday also denied “market rumours” that shares of cement manufacturers Ambuja Cement and ACC were pledged as collateral as part of the acquisition financing and that the group was under pressure to cover losses resulting from lower share prices.

The Adani Group’s debt was also hit by the sell-off, with dollar notes due in 2024 from Adani Ports dropping 20 cents to just under $0.70 on the dollar on Wednesday, while other notes due in 2024 from Adani Green Energy down about 10 cents. to $0.67 on Wednesday. dollar.

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