>>Adani Enterprises suspends work on Rs 34,900 cr petrochemical project
Adani Group has suspended work on a Rs 34,900 crore petrochemical project at Mundra in Gujarat as it focuses on resources to consolidate operations and address investor concerns following a damning report by a US-based short seller.
With the company trying to make a comeback for the time being the 1 million tonne per annum Green PVC project is one of the projects that will be suspended till further notice, reported PTI.
The group’s flagship Adani Enterprises Limited in 2021 had incorporated a wholly-owned subsidiary, Mundra Petrochem Limited for setting up a greenfield coal-to-PVC plant at Adani Ports and Special Economic Zone (APSEZ) land in Kutch district of Gujarat.
The unit was to have a poly-vinyl-chloride (PVC) production capacity of 2,000 KTPA (kilo tonne per annum) requiring 3.1 million tonne per annum (MTPA) of coal that was to be imported from Australia, Russia and other countries. (Updated on 19 March 2023)
>>More Adani group shares pledged.
More shares belonging to companies of the Adani Group have been pledged as security for loans taken by the group’s flagship firm, a SBICap Trustee said.
SBICap Trustee in notices to stock exchanges said that a further 0.99 per cent shares in Adani Green Energy Ltd were pledged “for the benefits of the lenders” of Adani Enterprises Ltd. An additional 0.76 per cent shares in Adani Transmission Ltd were also pledged to banks, the trustee said.
SBICap, which is a unit of State Bank of India (SBI), however did not give details of the loans taken by Adani Enterprises for which the pledge was created.
With the latest pledge, the total shares in Adani Green Energy Ltd – the group’s renewable energy company – that were encumbered with SBICap was 2 per cent. In the case of Adani Transmission, this came to 1.32 per cent.
The pledge was created a day after Adani group on March 7 said it has repaid Rs 7,374 crore (over USD 900 million) loans that were taken pledging shares in four group companies in an attempt to allay investor concerns over leverage and debt.
In September last year, CreditSights, a Fitch Group unit, said the group was “deeply overleveraged” as it used debt to expand an empire centred on ports and coal mining to include airports, data centres and cement as well as green energy.
The 10 listed Adani Group companies, which together had lost about USD 135 billion in market value following the Hindenburg Research report. (Updated on 9 March 2023 @ 9.00pm)
Adani Enterprises stock to please bears??
The stock of Adani Enterprises Ltd which is the flagship company of the group might again please the bears, some of the technical analysts believe.
The stock cracked a whopping 75% from an all-time high to a 52-week low, and from the lows, it more than doubled quite quickly.
After a quick rally from 28 February 2023 to 6 March 2023, the stock finally seems to be topping out. On 6 March 2023, the stock formed a Doji-like candlestick pattern which is denoting indecision among market participants after a sharp up move.
The second Doji was formed inside the shadows of the previous Doji as the range was minimized on the second day. This can also be seen as a volatility contraction, making the high and low of the Doji candle quite important.
Today, the share price of Adani Enterprises broke below the low of this Doji candlestick and is currently trading 4.7% down at INR 1,942, by 1:13 PM IST. This has essentially started the negative trend in the stock and due to very high volatility, Adani Enterprises shares could tank in a jiffy. (Updated on 9 March 2023 @ 9.00pm)
>>ICRA downgrades rating outlook of Adani Total Gas, Adani Ports to ‘negative’
Rating agency ICRA on Friday downgraded its outlook on Adani Total Gas Ltd and Adani Ports to ‘negative’ from ‘stable’ due to “deterioration in the Group’s financial flexibility”. ICRA downgraded following a sharp decline in share prices and an increase in the yield of international bonds raised by the Adani group entities”.
ICRA said Adani Total Gas has large capex requirements that need significant debt funding, which could be affected in the aftermath of the Hindenburg report.
“ICRA notes that while ATGL has staggered some of the capex plans over the next two years considering progress achieved in projects awarded in ninth and tenth rounds. Further, ATGL has funding tie-ups to meet the capex requirements in the near term, it has large capex requirements over the longer term which need significant debt funding. Hence, the Adani Group’s reduced financial flexibility can impact ATGL’s ability to raise funds from the domestic and international markets and result in higher cost of capital,” said the rating agency in its rationale for downgrading Adani Total Gas.
“Adani Ports’ track record of refinancing a large part of its debt with borrowings (mostly from overseas debt capital markets) of longer tenures at lower interest rates were the key credit strengths, which have been adversely impacted. Further, ICRA sees an increased risk of regulatory/legal scrutiny on the group entities and its impact on the credit quality of APSEZL will be monitored. However, ICRA notes that the APSEZL’s liquidity profile remains robust and a large repayment of international bond of $650 million is due only in FY2025,” said ICRA in its rationale for downgrading Adani Ports. (Updated on 4 March 2023 @ 6am)
>>Adani Shares Rise In India, but Investor GQG Partners’ Shares Fall In Australia
Adani Group investors have something to cheer about on Friday. The major listed companies of Adani Group have risen significantly on Friday, after over a month of continuous downfall. Adani Enterprises rose 38 per cent, Adani Transmission rose nearly 10 per cent, Adani Ports and SEZ rose nearly 18 per cent and Adani Green Energy rose over 21 per cent as of 11:20 am IST, Friday, 3 March 2023 with the news that US-based investment firm GNQ Partners pumped in $1.9 billion into Adani Group companies.
However, it doesn’t seem to have played out well for GQG Partners which is listed in ASX and Australian stock exchange. GQG Partners’ share price in ASX as of 4:10 pm GMT+11 stood at 1.44 AUD, 3.02 per cent down from previous close.
>>Adani group shores up liquidity.
On 2nd March 2023, Adani Group has sold minority stakes in four of its listed companies to US-based GQG Partners for Rs 15,446 crore, recovering from a sell-off triggered by a short-seller report, looks to shore up liquidity ahead of the USD 2 billion debt repayment due in the coming months. The group has a gross debt of Rs 2.21 lakh crore, about 8 per cent of which is due for repayment by the end of next fiscal year.
It sold shares in flagship incubating firm Adani Enterprises Ltd (AEL), Adani Ports and Special Economic Zone Ltd (APSEZ), Adani Transmission Ltd (AEL) and Adani Green Energy Ltd (AGEL).The deal happened through secondary market block deals.
GQG is investing in Adani portfolio companies which own and operate the largest airport and port platform in India, largest private sector transmission and distribution platform in India and that will generate about 9 per cent of India’s renewable energy capacity by 2030.
The share sale is considered as part of the Gautam Adani-led group’s comeback strategy after a damning report from an American short seller wiped out more than USD 140 billion off the conglomerate’s market value.
The news of stake sale has given boost to the market prices of Adani Group shares, on Friday, 3rd March.
Since Thursday when the leading US-based global equity investment boutique GQG Partners put in over Rs 15,000 crore in four Adani Group companies through a block deal, Mr. Rajiv Jain its CIO is in the news. He earned a name as a leading emerging markets fund manager at the Swiss firm of which he became the CIO in 2002.
Jain started GQG Partners around seven years ago in June 2016 and has owns a majority stake in the company. He invests most of his personal wealth in its funds.
Apart from GQG Partners, Goldman Sachs bought 8.2 million shares of Adani Transmission at Rs 668.4 per share while SB Adani Family Trust sold 8.86 crore shares in Adani Port at Rs 596.2 per share and GS Trust II – GS GQG Partners Intl Opportunities Fund bought 3.87 crore shares in Adani Port at Rs 596.2 per share.
>>On SC ruling on Adani row, Congress says any committee other than JPC an exercise in legitimisation
THE SUPREME Court’s direction to the SEBI to probe within two months allegations of stock price manipulation by the Adani group and any lapses in regulatory disclosures did not enthuse the Congress, which asserted that only an investigation by the Joint Parliamentary Committee can bring out the truth and industrialist Gautam Adani’s relationship with the Prime Minister.
Congress communication head Jairam Ramesh said the probe by a SEBI committee will be limited to violation of the regulator’s laws and regulations and issues like investor protection but the Adani issue is much more than that. “The Supreme Court committee is only of limited relevance in the context of what this controversy is all about,” he said.
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>>India’s GDP growth declines to 4.4 per cent in Q3
India’s gross domestic product (GDP) for the October-December quarter moderated to 4.4 per cent.
GDP at Constant (2011-12) Prices in Q3 2022-23 is estimated at Rs40.19 lakh crore, as against Rs38.51 lakh crore in Q3 2021-22, showing a growth of 4.4 percent. GDP at Current Prices in Q3 2022-23 is estimated at Rs 69.38 lakh crore, as against Rs 62.39 lakh crore in Q3 2021-22, showing a growth of 11.2 percent.
The manufacturing sector contracted by 1.1 per cent over the previous quarter when it had contracted 3.6 per cent. Meanwhile, the farm sector recorded a growth of 3.7 per cent in Q3 as against 2.4 per cent in Q2.
The mining sector surged to 3.7 per cent in Q3 as compared to a contraction of 0.4 per cent in the previous quarter. Electricity and construction sectors witnessed an increase of 8.2 per cent and 8.4 per cent respectively during Q3 as against 6 per cent and 5.8 per cent respectively in Q2.
Services sectors eg Hotels and transport declined sharply to 9.7 per cent as against 15.6 per cent in Q2. Real estate grew at 5.8 per cent as compared to 7.1 per cent in Q2. Meanwhile, defence sector grew by 2 per cent in the October-December quarter as against 5.6 per cent in July-September quarter.
>>JP Morgan dumps Adani stocks from its ESG funds
Losing market value without any respite, Adani stocks have been abandoned by JP Morgan Chase, from its environmental and social governance funds. Adani stocks are bleeding as shares of group firms have crashed by as much as 84 per cent since Hindenburg Research triggered off a storm. Although LIC and Indian banks have maintained that exposure to the Adani Group is within manageable limits, global entities seem confirmed.
As of now, JP Morgan still owns Adani stocks in the non-ESG funds, as the group is becoming more toxic for fund managers.
Another aspect of above news may have serious consequences. Currently, Adani stocks are part of 500 ESG funds in Europe, which includes funds with at least $10 billion under management. While they are on the MSCI ESG indexes, S&P has removed Adani stocks from its sustainability index, and Sustainalytics has downgraded the ESG scores of the group’s firms. So, if these funds decide to dump Adani Stocks, the matter can be much more complicated.
>>India’s economic growth appears to be very fragile, believes RBI monetary policy committee member Varma
India’s economic growth appears to be ‘very fragile’ and it may fall short of what the country needs to meet the aspirations of its growing workforce, RBI Monetary Policy Committee (MPC) member Jayanth R Varma said.
Explaining further, he said rising EMI payments increases the pressure on household budgets and dampens spending, and exports are struggling in the face of global factors.
Varma said he expects inflation to remain high in 2022-23 but come down significantly in 2023-24. “However, growth appears to be very fragile, and monetary tightening is compressing demand,” he told PTI.
>>Orient Cement terminates MoU with Adani company
Orient Cement on Wednesday the Mou with Adani Power Maharashtra Ltd (APML) has been terminated as the Adani Group firm wasn’t able to obtain required clearances.
In September 2021, Orient Cement announced a MoU with APML for “facilitating bona fide use of land identified for exploring the possibility of establishing a cement grinding unit (CGU) at Tiroda (in Maharashtra)”.
In a stock exchange filing, Orient Cement said Adani Power has requested it to not pursue with the venture further.
Adani Power told Orient Cement it wasn’t “able to obtain the required MIDC clearances for sub-leasing the parcel of land required for the CGU, due to some legal issues. Also, the timelines as agreed upon as per MoU have crossed”.
>>Adani stock value erosion affected many of Australian retirement savings funds: The Guardian
The deepening crisis of Adani Group stock value erosion has affected a number of Australian retirement savings. According to a report in The Guardian, several Australian retirement funds had actively invested in the Gautam Adani-controlled companies, including those that cater to government workers in Queensland and employees at the Commonwealth Bank.
Since January 24 this year, the Adani Group stocks have collectively lost a whopping $134 billion in market value. In less than a month, Adani stocks have lost 60% of their value.
The Guardian report said that a number of superannuation funds had actively invested in Adani group companies after allocating money to emerging markets to boost returns.
Australia’s $243-billion Future Fund, which was set up to strengthen the commonwealth’s long-term financial position, has invested in two Adani companies that are now worth a fraction of the original investment.
Brisbane-headquartered Australian Retirement Trust, with more than $200 billion in assets, had invested million of dollars in at least six Adani entities before the report was released.
The investment was part of a “passive” allocation, whereby the fund appointed external fund managers to invest on its behalf in a particular country or sector, often tracking an index, the Guardian report said.
The fund offers superannuation products to Queensland government employees and their families as part of its service.
The Adani-controlled conglomerate owns several companies with interests ranging from energy to transportation across the globe, including in Australia, where it operates the Carmichael coal mine and the Abbot Point port, which was renamed North Queensland Export Terminal.
Speaking to the Guardian, Will van de Pol, a Market Forces asset management campaigner, said: “Any super fund investing in Adani Group companies has failed its members on climate action and due diligence.”
>>Hindenburg founder now says Adani’s team ‘systematically manipulate’ Wikipedia entries.
Nathan Anderson, the founder of US short seller Hindenburg Research, fired another salvo at the Gautam Adani-led Adani Group citing Signpost, Wikipedia’s independent newspaper.
“Signpost is out with an article showing how Adani systematically manipulated its Wikipedia entries using sock puppet accounts, undisclosed paid editors and removing evidence of conflicts of interest,” tweeted Anderson.
For more than a decade, sockpuppets – some of them being company employees – created ‘puffery’ around billionaire Gautam Adani, his family and the ports-to-power conglomerate he helmed by adding non-neutral material and removing warnings from information on Wikipedia, the free internet-based encyclopedia has alleged.
Adani bulls are sitting at a colossal loss of Rs 11 lakh crore as stocks belonging to embattled billionaire Gautam Adani have lost around 57% of its market value in less than a month’s time after the release of an explosive report by Hindenburg.
This followed Hindenburg Research accusing the group of accounting fraud, stock price manipulation and money laundering, allegations that the conglomerate has repeatedly denied, and threatened legal action.
Wikipedia in a February 20 ‘Disinformation Report’ referred to the ”con” alleged by Hindenburg, to ask ”Did he (Adani) and his employees also try to ”con” Wikipedia readers with non-neutral PR versions of related Wikipedia articles?” It went on to answer the question, ”Almost certainly they did.” ”Over 40 later banned or blocked sockpuppets or undeclared paid editors created or revised nine related articles on the Adani family and family businesses. Many of them edited several of the articles and added non-neutral material or puffery,” it said. (A sockpuppet is a phony name or identity created by an online user to argue, bully or review products as another person.)
Wikipedia is a wiki, meaning anyone can edit nearly any page and improve articles immediately. But the principle it operates on is neutrality.
Adani row: Mahua Moitra takes a dig, highlights article on ESG red flags.
Adani Total Gas, Adani Transmission hit fresh 52-week lows;
Trinamool Congress MP Mahua Moitra took a dig at the Adani Group and said that another “foreign conspirator” has now published an article on the conglomerate accusing it of borrowing cheap funds under the guise of green renewables and diverting it to coal.
According to Bloomberg data, more than 500 funds registered in the European Union as promoting ESG goals directly or indirectly hold Adani stocks.
Moitra was referring to an article by Bloomberg that said that financing arrangements across the group are exposing a web of red flags concerning the environmental, social and governance (ESG).
Sharing screenshots of the article, Moitra said, “Adani borrowing cheap funds under guise of “Green” renewables & diverting to coal. Article from another “foreign conspirator” – Bloomberg business”.
Ulf Erlandsson, chief executive of Anthropocene Fixed Income Institute that has been tracking the group since mid-2020 said that investments in other parts of the Adani Group are leaking into the funding of Carmichael. “Investors who have restrictions on funding greenfield thermal coal mining should revisit potential exposures across the whole of Adani Group,” Erlandsson told the news site.
Shares of Adani Total Gas and Adani Transmission fell to their respective one-year lows in Monday’s session. Adani Total dived 5 per cent to hit its 52-week low of Rs 925.10 today. Adani Transmission also declined in the same quantum of 5 per cent to touch its one-year low level of Rs 873.90. Adani Total Gas has slumped around 76 in 20 straight sessions; while Adani Transmission has lost nearly 34 per cent in eight consecutive days. (Updated on 20 Feb 2023 @ 1.00 pm)
>>Hindenburg alleges Gautam Adani’s brother pledged Adani Group promoter stakes for $240-mn loans from Russian bank
US short seller Hindenburg Research fired another salvo at Adani Group and it involves Vinod Adani, the elder brother of Gautam Adani.
“Forbes is out with a major article evidencing hidden Adani promoter pledges: A private Vinod Adani-controlled Singaporean entity pledged Adani promoter stakes for $240m in loans from a Russian bank. Zero disclosure of these pledges to Indian exchanges,” tweeted Hindenburg on Friday.
Seven listed firms of the Adani Group have shed some $125 billion in market value since Hindenburg’s January report, which accused the ports-to-power conglomerate of improper use of tax havens and stock manipulation, which Adani Group denied.
“Vinod Adani, the longtime Indian expat, is at the heart of a global web of offshore companies with ties to the Adani Group. Just don’t call him a related party,” said the Forbes article. Vinod Adani is based in Dubai and manages trading businesses there, as well as in Singapore and Jakarta. He is the richest non-resident Indian in the world, according to the Hurun India Rich List.
The article claimed that Pinnacle Trade and Investment Pte. Lte., a Singapore company indirectly controlled by Vinod Adani, had in 2020 entered into a loan agreement with Russia’s state-owned VTB Bank, which was sanctioned by US last year due to Ukraine war. By April 2021, Pinnacle had borrowed $263 million and lent out $258 million to an unnamed related party. Later that year, Pinnacle offered two investment funds — Afro Asia Trade and Investments Limited and Worldwide Emerging Market Holding Limited — as guarantors for the loan, according to Singapore filings, said the article.
Both Afro Asia Trade and Worldwide are large Adani Group shareholders. Together, the two funds hold $4 billion (as of February 16 market prices) of stock in Adani Enterprises, Adani Transmission, Adani Ports, and Adani Power, all of which acknowledge the funds as ‘promoter’ entities.
Neither fund has disclosed share pledges in Indian financial filings for the four Adani companies they’re invested in.
Earlier this month, the SEBI told the Supreme Court it was looking into the allegations made against the Adani Group. (Story by Business Today Desk, 17 Feb 2023 11:27 pm)
>>The Supreme Court on Friday refused to accept the Centre’s suggestions in sealed cover on a panel of experts to strengthen regulatory measures for the stock market. The top court said it would rather not accept the Centre’s suggestions in a sealed cover, in a bid to ensure transparency.
We will not accept the sealed cover suggestion by you because we want to maintain full transparency,” the bench said.
>>Sell-off in Adani group shares resumes after Soros’ comments
The sell-off in Adani group stocks resumed on Friday, a day after the group companies witnessed buying across the board. By Midsession, on Friday, the cumulative market capitalisation of the nine Adani group companies declined by Rs 18,619 crore. On Thursday, noted businessman and philanthropist George Soros said that the Adani group crisis will spur a “democratic revival in India”.
Soros made the remarks at the 2023 Munich Security Conference.
On Thursday, noted businessman and philanthropist George Soros said that the Adani group crisis will spur a “democratic revival in India”, adding that Prime Minister Narendra Modi will have to answer questions about the allegations of stock manipulation and accounting fraud against the group.
George Soros, 92, said in a speech on Thursday that Prime Minister Narendra Modi will be weakened as a politician due to the financial troubles Gautam Adani finds himself in. He was talking with reference to the Hindenburg report accusing the group of stock price manipulation. Thousands of crores of stock value of the Adani Group had been wiped out due to the accusations that were later denied by the tycoon.
“Adani Enterprises tried to raise funds in the stock market, but he failed. (Gautam) Adani is accused of stock manipulation and his stock collapsed like a house of cards. Modi is silent on the subject, but he will have to answer questions from foreign investors and in parliament,” Soros said.
However, hitting back at Soros, union minister Smriti Irani said, “George Soros, who hedges bets against many countries, has now made known his ill intentions in the democratic processes of India. Those who support Soros need to know that democracy has prevailed in India and continues to do so.”
Who is George Soros?
George Soros is a businessman and philanthropist. He had a net worth of $8.6 billion till March 2021. According to western media, he has donated $32 billion dollars to Open Society Foundations. He is called The Man Who Broke The Bank of England in 1992 because he short sold $10 billion worth of pounds that made him a profit of $1 billion.
>>S&P to review ESG practices of Adani Transmission
Credit ratings agency S&P announced it will review the environmental, social and governance (ESG) practices of Adani Transmission (ATL). The decision by the ratings major is a fallout of the recent allegations of governance issues at the Adani Group that has impacted the stock and bond prices of all group companies, including that of ATL.
The rating agency said allegations related to group governance and disclosures may affect the appetite of fund providers and business partners to support ATL’s growth. “This may raise financial and operational risks for the company.” S&P believes its current assessment of ATL’s governance factors in some controlling shareholder’s weight in decision-making, including on related-party transactions.
S&P said that it aims to complete its review of the ESG evaluation in the coming months. “We will assess the implications of the allegations on our ESG Evaluation,” the rating agency said
Gautam Adani, the group’s chairman, and his family together own 75% stake in ATL, which is India’s largest private power transmission and distribution company. In the fiscal year ended March 31, 2022, ATL operated 18,795 circuit kilometers of electric transmission lines. It had a total transformation capacity of 40,001 megavolt amperes. It also owns a 500-megawatt coal-fired power plant. On Thursday, ATL stock on the BSE closed at Rs 997, at 5% lower circuit.
One of the allegations by the US-based short-seller Hindenburg Research was about the role of Vinod Adani, the group chairman’s elder brother. Hindenburg alleged that Vinod Adani was managing several Mauritius-based entities, which in turn were investing in Adani Group’s stocks. The group, however, said Vinod Adani was a private entity and it had no control about how a private entity invested its money.
(Updated on 17 February 2023 @ 7.30 am)
>>Adani Group needs to pare down its assets and SEBI needs to wake up: Mahua Moitra
Trinamool Congress MP from Krishnanagar, Mahua Moitra, suggests that Adani Group needs to pare down its assets and market regulator SEBI needs to wake up. Moitra was referring to Adani Power’s deal with DB Power that collapsed as the deadline to complete the Rs 7,017 crore deal ‘expired’.
The Trinamool MP Mahua Moitra has been vocally critical of the conglomerate and the market regulator. She has been vociferously demanding SEBI to “do its job”.
“Why has SEBI been the silent operator? Why would they permit a Rs 20,000 crore FPO without (submitting) an investigation report? Why didn’t SEBI ask whether bankers had signed off on the valuation? How’s Mr. A’s son’s father-in-law allowed to be on the SEBI committee on insider trading and corporate governance? How?” Moitra asked at the Lok Sabha.
In an earlier tweet she said that the entire Adani fiasco has made a monkey of every Indian.
“Making a monkey of every Indian & insulting our collective intelligence. There is no conspiracy to tarnish India. A crony capitalist breaks every rule in book to create house of cards at investors’ expense. @SEBI_India do your job!
Meanwhile, she also slammed the government and the regulators at the Lok Sabha for not probing allegations against the conglomerate by Hindenburg Research.
Chanakya talked to many investors in the stock market, and they also opine that the group should let go some of the companies which have been acquired recently at costly valuations. They hint about the recent ACC-Ambuja acquisition.
Report of Grant Thornton audit is just “market rumour”
Adani Group has issued a clarification on media reports that stated that the conglomerate had hired accountancy firm Grant Thornton for independent audits of some of its companies. The conglomerate called the hiring news “market rumour”.
>>MSCI to review Adani companies’ ESG and climate indexes this week?
MSCI inc is expected to release the results of a quarterly review for Adani Group companies’ ESG and climate indexes this week, the first since US-based short seller Hindenburg’s allegation. If it reflects a significant downgrade in the ESG ratings of any of the Adani companies, it may trigger a fresh round of selling.
S&P Global Inc. said this month it was removing Adani Enterprises from its Dow Jones Sustainability Indexes. Sustainalytics last week downgraded the ESG scores of several Adani companies.
(updated on 16 Feb 2023 @ 8.20 am)
>>Adani company gives up bid to acquire DB Power
Adani Power’s planned Rs 7,017-crore acquisition of DB Power collapsed on Wednesday as the deadline to complete the transaction expired. The deadline to complete the transaction was extended four times, with the final closing date as February 15, 2023.
Gautam Adani’s conglomerate reviews capital expenditure plans in the wake of a massive sell-off of his companies’ shares,
Adani Power had signed a purchase agreement for DB Power on August 18, 2022, and planned to conclude the deal by October 31, 2022. The deadline was repeatedly extended. DB Power owns a 1,200-megawatt coal-fired power plant in Janjgir Champa, Chhattisgarh, and its enterprise value including debt was estimated at Rs 7,017 crore.
>>Adani-Hindenburg row: SC agrees to hear fresh PIL of Congress leader on February 17
In light of the accusations made by the US-based Hindenburg Research, the Supreme Court agreed on Wednesday to hear a new petition from a Congress leader asking for an investigation against the Adani Group of Companies to be conducted under the supervision of a sitting apex court judge on February 17.
Justice P S Narasimha and Chief Justice D Y Chandrachud’s bench took note of the arguments made by the attorney for Congress leader Jaya Thakur that the case needed to be heard quickly.
Thakur has also sought a direction for investigating the role of the LIC and the SBI in investing huge amounts of public money in the FPOs of Adani Enterprises, allegedly at a much higher rate than the prevailing share price in the secondary market.
(Content Curtsey: Free Press Journal, leading newspaper in India)
>>Popularity of Hindenburg soars on Twitter
The report on the Adani Group may well have made Hindenburg Research and its founder Nathan Anderson unpopular among the Ahmedabad-based conglomerate, but the firm and its founder – are gaining a lot of popularity on social media.
Data shows that the follower count of Hindenburg Research jumped by nearly 2.5 lakh in the last one month with the total count now pegged at nearly 4.5 lakh.
>>Grant Thornton, can it bring back confidence?? (On 16 Feb, Adanis have clarified this as just rumour)
After hiring New York-based lawfirm Watchwell to counter Hindenburg in court, Adani has turned to American firm Grant Thornton for an audit. Almost a century old, the world’s seventh largest accounting network has been picked by Adani to establish credibility.
With 60,000 people working for it in 150 countries, the firm has also provided technical assistance for India’s Clean Ganga mission. They are also strategic advisors for the NITI Aayog, helping it with more efficient public investment.
Role in Kingfisher fiasco?: But closer to home, Grant Thornton India had faced scrutiny from the CBI in 2018, for valuing the now grounded Kingfisher Airlines at Rs 4,100 crore. When lenders conducted their own calculations of the firm owned by financial fugitive Vijay Mallya, they found that it was worth only Rs 160 crore. Hence Grant Thornton was under the scanner for inflated valuation of the carrier.
Faulty audits & fines
But the major accounting firm challenging the likes of Big Four, has its own history of missing out on details. For instance, last year the British regulator fined Grant Thornton more than $1.5 million, over a faulty audit of Sports Direct.
In another case, it was hit by a penalty of more than $2.8 million for missing red flags in its audit of Patisserie Valerie, which eventually collapsed. Grant Thornton was found guilty of not questioning the information that was provided by the firm’s management.
By going for independent audits from this global network of accountants, Adani is hoping to discredit the Hindenburg report. Unless the scope of its work is not elaborate, such auditing (that too by a firm which is associated with Clean Ganga mission) is not expected to bring back confidence of the domestic and foreign investors and foreign bankers.
>>Adani row: Jaya Thakur approaches SC seeking investigation
Congress leader Jaya Thakur on Tuesday approached the Supreme Court seeking investigation against the Adani Group in the wake of the allegations of stock manipulation and accounting fraud levelled by the US-based Hindenburg Research. Read more
>>The Income Tax Department has raided / conducted Survey the Delhi office of the BBC, located in Kasturba Gandhi Marg. The phones of employees have been seized. Employees have also been asked to leave the office and go home early. Over 100 employees, who were working in the morning shift, have been held back at the Delhi bureau office. The majority of them belong to editorial teams. Those in the afternoon shift at the Delhi office have been asked to work from home.
>>Adani Enterprises posts Rs 820-cr profit
Adani Enterprises returned to black in the December 2022 quarter as the company reported a net profit at Rs 820.06 crore on Tuesday amid strong performance in its key coal trading division and airports business during the quarter. The company had reported a net loss of Rs 11.63 crore in the December 2021 quarter. Study the results in detail @ Adani Enterprise Q3 results (chanakyanipothi.com)
>>Adani seeks capital infusion from IHC??
Shares of Adani group companies eg. Adani Enterprises, Adani Power, Adani Ports & SEZ and Adani Green Energy fell up to 5 per cent in Tuesday’s morning trade amid reports the group has been in talks since last week with Abu Dhabi’s International Holding Corp (IHC) to infuse capital into Adani Enterprises & other group entities.
As per the ET report, the quantum of investments has not yet been finalized, but sources told ET the group was looking at a $1-$1.5 billion infusion of ‘confidence capital.’
Adani group stocks continued to bleed on Tuesday with six scrips hitting the lower circuit. Adani Enterprises shares fell nearly 3% to Rs 1,667 on NSE ahead of Q3 earnings report. Note that valuation guru Aswath Damodaran found the stock to be worth Rs 945 apiece whereas Devina Mehra values the said share at much lower price. (Updated on 14 Feb 2023 @ 12.30pm)
>>Adani Group hires accounting firm Grant Thornton to conduct independent audits.
With a view to refute allegations made by short-seller Hindenburg Research that have hurt its stocks and bonds, India’s Adani Group plans to hire accounting firm Grant Thornton to conduct independent audits of some of its companies.
The appointment represents the Adani Group’s first significant attempt to defend itself following a Hindenburg investigation from January 24 that accused the company of improperly using offshore tax havens and stock manipulation.
What will be the exact scope of the audit and whether the information about investments through Mauritius will be certified by the said auditors is not known. Whether the scope of the audit will be made public or just name is announced is also not known.
Investors are nonetheless anxious despite the conglomerate’s vehement denials of the accusations under billionaire Gautam Adani’s leadership. The market value of the seven listed subsidiaries of the group’s shares has decreased by a total of nearly $120 billion during the past three weeks.
>>Adani Enterprises will announce its December quarter results today. Shares of this Adani group firm have erased half of market value following the Hindenburg Research’s scathing report that made several allegations on the group including stock manipulations, money laundering and accounting frauds. (updated on 14 Feb 2023 @ 10.40am)
>>SC proposal of setting up of a panel of experts
The Centre has no objection to a proposal for setting up a panel of domain experts to look into strengthening the regulatory mechanisms for the stock market, the Supreme Court was told on Monday while it was hearing pleas relating to the Adani stocks rout after the Hindenburg report.
(updated on 14 Feb 2023 @6.00am)
Next Supreme Court hearing on Feb 17 on Adani-Hindenburg PILs
The Supreme Court on Monday said that it will next hear the PILs on the Adani-Hindenburg matter on Friday, February 17. Government’s lawyer told the apex court that the Centre is not opposed to setting up panel on the recent Adani stock selloff.
The stock rout in the Adani Group companies started after US-based short-seller Hindenburg’s report last month. The stocks of Adani Group companies continued to fall even on Monday with Adani Enterprises declining 8 per cent, Adani Total Gas, Adani Power and Adani Transmission slipping 5 per cent each (updated on 13 Feb @7.40)
>>Sebi to meet FM to provide update on probe, this week
It will be a crucial week for the Adani Group. Market regulator Sebi board is expected to meet with Finance Minister Nirmala Sitharaman and provide an update on its investigations into the Adani Group’s withdrawn secondary share sale, according to two sources quoted in a Reuters report. An update on investigations into offshore fund flows involving Adani Group entities is also likely
The meeting is likely to be held on February 15, said the sources, adding that Sebi’s board will brief the finance minister on surveillance measures taken by the regulator during the recent rout in Adani Group stocks.
The group continues to face downgrades from major global financial institutions, which could ultimately hurt its long-term growth plans. (updated on 13 Feb 2023,11.54)
>>Moody’s cut Adani Green Energy Outlook
On Monday morning, four Adani Group stocks hit a lower circuit in the early trade after a ratings outlook cut by Moody’s dampened investors’ sentiment. Adani Green Energy shares were locked in the lower circuit, falling 5% to Rs 687.75 after Moody’s downgraded the company’s outlook to ‘negative’ from ‘stable’.
The cut in Adani Green Energy Ltd’s outlook to ‘negative’ considers the company’s refinancing needs, huge capital spending program and dependence on sponsor support, potentially in the form of subordinated debt or shareholder loans, which will likely be less certain in the current environment.
“The negative outlook also factors in the company’s significant refinancing needs of around $2.7 billion in the fiscal year ending March 2025 and limited headroom in its credit metrics to manage any material increase in funding costs,” Moody’s said in a statement last week.
Adani Power shares tanked 5%, trading at Rs 156.10, Adani Transmission was down 5% at Rs 1126.85 and Adani Total Gas fell 5% to Rs 1195.35. On the flip side, Adani Enterprises and Adani Ports and Special Economic Zone shares were up marginally. Meanwhile, BSE Sensex fell 130.01 or 0.21% to 60,552.69 and NSE Nifty 50 dropped 27.25 pts or 0.15% to 17,829.25. (updated on 13 Feb 2023 @11.30am)
>>Adani slashes growth targets
Adani group has halved its revenue growth target and plans to scale down fresh capital expenditure. Bloomberg News reported on Sunday. The group will now aim for revenue growth of 15% to 20% for at least the next financial year, down from 40% originally targeted, Bloomberg News said.
Listed companies controlled by billionaire Gautam Adani have lost more than $100 billion in market value since Jan. 24, when U.S. short seller Hindenburg Research accused the conglomerate of stock manipulation and improper use of offshore tax havens. The group has rejected the allegations and denied any wrongdoing.
Adani group has also been a part of India’s market regulator’s investigation into the group’s links to some of the investors in its scrapped $2.5 billion share sale.
>>What is the Debt burden on Adani Group companies?
As per calculations by Nikkei, the liabilities attributed to 10 of Adani’s listed group companies, including ACC, Ambuja Cements and New Delhi Television – which the conglomerate purchased last year – add up to Rs. 3.39 lac crores. The Adani group includes a multitude of privately-held companies, meaning its total debt load could be higher,” it added.
India’s nominal gross domestic product at the end of October stood at 273 trillion rupees, the International Monetary Fund reported. That puts Adani’s debts as a percentage of the economy at around 1.2%. As per the RBI’s current assessment, the banking sector remains resilient and stable. Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy.
>>Three Adani group companies have pledged shares for lenders to Adani Enterprises, SBICAP Trustee Co said in a Friday filing to the Bombay Stock Exchange. SBICAP Trustee Co is a unit of India’s biggest state lender, State Bank of India.
>>Adani Wilmar to be dropped from S&P BSE IPO index
Asia Index Pvt Ltd on Friday said Adani Wilmar, AGS Transact Technologies and Vedant Fashions would be dropped from the S&P BSE IPO (initial public offering) index. The reconstitution would be effective February 20, 2023, S&P Dow Jones and BSE stated in a joint release.
Asia Index is a 50:50 partnership between S&P Dow Jones Indices LLC and India’s BSE.
Adani Wilmar reported a 16 per cent year-on-year (YoY) rise in consolidated net profit at Rs 246 crore for the December quarter compared with Rs 211 crore in the corresponding quarter last year.
Revenue for the quarter rose 7 per cent YoY to Rs 15,438 crore compared with Rs 14,371 crore in the same quarter last year. The company said volume for the quarter grew 16 per cent YoY, thanks to a large opportunity available in the packaged food industry.
>>Moody’s changed outlook on four Adani companies to ‘negative’
Moody’s Investors Service on Friday announced it has changed the outlook on four Adani group companies to ‘negative’ from ‘stable’, while maintaining the stable outlook on four other group companies. It, however, maintained its ratings on all eight Adani group companies.
The four companies whose outlook has been changed to ‘negative’ are Adani Green Energy, Adani Green Energy Restricted Group, Adani Transmission Step-One and Adani Electricity Mumbai.
Adani Ports and Special Economic Zone, Adani International Container Terminal, Adani Green Energy Restricted Group and Adani Transmission Restricted Group 1 are four Adani group companies whose outlook stayed stable, Moody’s said.
These rating actions, Moody’s said, follow the significant and rapid decline in the market equity values of the Adani Group companies following the recent release of a report from a short seller highlighting governance concerns in the Group.
Moody’s changed the outlook for Adani Green to ‘negative’ from ‘stable’, while keeping its rating at Ba3 ratings.
MSCI Strips 4 Adani Companies
MSCI has cracked the whip on the Adani Group. After releasing a statement saying it will scrap the free float status of certain Adani Group companies following feedback from “a range of market participants”, the index provider on Thursday announced that it will cut the weighting of four Adani Group companies — Adani Enterprises, Adani Total Gas, Adani Transmission and ACC.
According to MSCI, the free float of security is defined as the proportion of shares outstanding that is considered available for purchase in the public equity markets by international investors. Study Related Video
>>SEBI is believed to be investigating Adani Group’s links to some of the Anchor investors in the aborted $2.5-billion share sale of Adani Enterprises, two sources said, amid growing concern in New Delhi about a US short-seller’s allegations against one of the country’s top industrial groups.
The SEBI is believed to be investigating relationships between Adani and at least two Mauritius-based firms: Great International Tusker Fund and Ayushmat Ltd.,which participated as anchor investors.
Under India’s capital market rules, any entity related to a company’s founder or the founder group is ineligible to apply under the Anchor Investor category. The focus of the probe would be whether any of the anchor investors are “connected” to the founder group.
Also under the SEBI scanner are Elara Capital and Monarch Networth Capital, two of the 10 investment banks that managed the share offering, the sources said, adding that SEBI had approached the two firms last week. The short-seller also alleged that a Mauritius-based fund of Elara has invested 99% of its market value in three Adani stocks.
In recent days, the fallout of the allegations by Hindenburg, which stood to profit from the fall in the value of Adani Group assets, has come up repeatedly as a cause for concern at the national level, including at Prime Minister Narendra Modi’s office, two government officials said.
>>Devina Mehra, Chairman and MD at First Global feels the fair value of Adani Enterprise is Rs 645,
In a series of tweets, Devina Mehra, Chairman and MD at First Global feels the fair value of Adani group firm is Rs 645, less than the Rs 945 value that valuation guru Aswath Damodaran derived for the Adani group stock in his latest Blog.
Mehra believes Damodaran himself mentioned an equity risk premium over risk-free rate of 4.5 per cent. She said if one considers the cost of capital (risk free rate plus risk premium) at 12 per cent, factoring in a logical risk-free yield of 7.3 per cent in India, the Adani Enterprises stock’s valuation should drop to Rs 645.
Mehra said Damodaran himself said that he has taken fairly optimistic forecasts on cashflows, assuming everything is on schedule, and nothing goes wrong. This she said was a big assumption, especially in infrastructure sector where slippages are common. If terminal growth rates aren’t met, fair value goes down further, she said.
In his value estimation, Damodaran did not factor in the damage that might have been done to the Adani Enterprises’ reputation and long-term value by the Hindenburg episode. Study the Twitter link
>>Gautam Adani has hired one of the most expensive legal firms in the US, Wachtell, in its fight against short-seller Hindenburg Research. Known to be one of Wall Street’s fiercest defence law firms, Wachtell has been hired as the Adani Group seeks to reassure its investors about the conglomerate’s health.
Wachtell has been reportedly seeking further advisory support for the Adani Group, including from crisis communications firms. The law firm that has expertise in thwarting unwanted attacks by corporate raiders will focus on co-ordinating legal, regulatory, and public relations for the conglomerate.
>>India’s largest life insurer Life Insurance Corp (LIC) of India will soon reach out to the Adani group’s top management to understand what is happening in the market, to know the business profile and how are they planning to work around the situation.
>>The decision to strip some Adani stocks of the free float label was taken by Morgan Stanley Capital International after reviewing feedback from several market participants. The MSCI cited uncertainty in the characteristics of certain investors as a reason for changing the designation.
SC agrees to hear on February 10 plea seeking probe into Hindenburg Research report
The Supreme Court has agreed to hear on Friday a plea seeking a direction to the Centre to constitute a committee monitored by a retired apex court judge to inquire and investigate into the Hindenburg Research report which has made a slew of allegations against the business conglomerate led by industrialist Gautam Adani.
In his public interest litigation, Tiwari has also sought directions to set up a special committee to oversee the sanction policy for loans of over Rs 500 crore given to big corporates.
>> The stocks crashed in the opening session.
MSCI announced on Thursday it had determined that some Adani securities should no longer be designated as free float after market participants raised concerns about the eligibility of the Indian conglomerate’s companies for some of its indexes.
“MSCI has determined that the characteristics of certain investors have sufficient uncertainty that they should no longer be designated as free float pursuant to our methodology,” it said in a statement.It defines the free float of a security as the proportion of shares outstanding that is considered available for purchase in public equity markets by international investor.
>>Adani stocks crashed up to 15% as MSCI fear triggers another round of sell-off.
After showing some recovery in the last two trading sessions, Adani stocks were once again under selling pressure on Thursday after index provider MSCI said it will conduct a free-float review of the conglomerate’s securities.
In Adani’s 10-stock pack, flagship entity Adani Enterprises was the worst performer as it was locked in a 15% lower circuit limit at Rs 1,834.9. Six other stocks – Adani Ports, Ambuja Cements, Adani Power, Adani Transmission, Adani Total Gas and Adani Green – were trading 5% lower each.
On the other hand, Adani Wilmar was the only stock in the group to be trading on a higher note. It was 1.4% higher at Rs 424.25 on BSE.
>>TotalEnergies puts hydrogen partnership with Adani on hold.
TotalEnergies, which has an exposure of $3.1 billion in Adani group, will wait for the result of an audit launched by the conglomerate in response to allegations levelled by Hindenburg Research.
While the partnership with Adani group was announced in June last year, TotalEnergies has not yet signed a contract, the French group’s chief executive Patrick Pouyanne said at earnings call. “Obviously, the hydrogen project will be put on hold until we have clarity,” Pouyanne said.
France’s TotalEnergies, one of the largest foreign investors in billionare Gautam Adani’s business empire, said it has put on hold participation in Indian conglomerate’s $50 billion hydrogen project pending results of an audit launched following allegations by a US short-seller. TotalEnergies has investments in several group companies of Adani, like 50 per cent in Adani Total, 37.4 per cent in Adani Total Gas, and 19.75 per cent in Adani Green Energy Limited.
As per the June 2022 announcement, TotalEnergies was to take 25 per cent equity in Adani New Industries Ltd (ANIL) – the Adani Group firm that is investing $50 billion over 10 years in green hydrogen ecosystem that includes an initial production capacity of 1 million tonnes before 2030.
“It was announced, nothing was signed. It doesn’t exist,” Pouyanne said after the earnings presentation in Paris on Wednesday, referring to the new hydrogen venture with the Adani Group.
Pouyanne said the company was waiting for the result of an audit launched by the Indian conglomerate in response to allegations of financial irregularities by Hindenburg Research.
Last week, France-headquartered TotalEnergies said that Adani Group will hire one of the ‘big four’ (Deloitte, EY, KPMG, and PwC) accounting firms to carry out a general audit.
On Wednesday, TotalEnergies CEO Pouyanne added that TotalEnergies is not in charge of the financial health of the Adani group, with whom it has a number of joint ventures.
Adani Total Gas share price: Around 40,000 shares changed hands today on BSE, which was lower than the two-week average volume of 70,000 shares. Turnover on the counter stood at Rs 5.51 crore, commanding a market capitalisation (m-cap) of Rs 1,53,330.02 crore.
Adani Total Gas is a joint venture between France’s energy major TotalEnergies and Adani Group.
Nationalise the assets of Adani Group: BJP leader Subramanian Swamy demands!!!
Senior BJP leader Subramanian Swamy has said he wants the Centre to nationalize the assets of Adani Group, which has faced scrutiny after its stocks tumbled following a report over its financial deals and a ruckus was created in Parliament by opposition parties over it.
PM Modi should nationalize all assets of Adani Group and then auction it for sale: Subramanian Swamy
Excerpts from the interview with PTI —
Question: How do you think the BJP government has handled the Adani Group issue, while opposition parties are demanding action against the beleaguered conglomerate?
Answer: I would like to see the Prime Minister nationalise all the assets of Adani Group and then auction it for sale and out of that money, help people who have lost this way. As if Congress didn’t have deals with Adani. I know many of them who had lots of deals with Adani but I don’t care for the Congress. I want the purity of the BJP to be established. The general public opinion is that (Prime Minister Narendra) Modi has something to hide and now it is the job of the government to punish it.
>>Aditya Birla Group forays into premium casual dining space
The Aditya Birla Group has announced its foray into the premium casual dining space, a fast-growing segment in the organised food services market, in collaboration with chef-restaurateur, Rahul Akerkar. The Group’s hospitality arm, housed under Aditya Birla New Age, promoted by Aryaman Vikram Birla, will build premium casual dining restaurant chains across India. The first restaurant will be launched in Mumbai next quarter.
>>Study What Mr. Powel has to say:
Fed Chair Powell says inflation is starting to ease, but interest rates still likely to rise.
Markets latched onto Powell’s words and briefly turned positive, before flipping back to negative after he cautioned about stronger-than-expected economic data.
“If we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have do more and raise rates more than is priced in,” he said.
“The disinflationary process, the process of getting inflation down, has begun and it’s begun in the goods sector, which is about a quarter of our economy,” the central bank chief said during an event in Washington, D.C. “But it has a long way to go. These are the very early stages.”
Adani updates of the Day (6 Feb 2023)
>>Sebi insists on Ownership updates
The Sebi has shot off an email, asking Designated Depository Participants (DDPs) operating within Indian banks to update the beneficial ownership details of the foreign portfolio investors on-boarded as their clients within September 30. Read More
>>Adani may trim its capex in some businesses.
While providing more collateral in the form of stock pledges to lenders, the Adani Group may moderate its capex plans in some of its businesses. Read more Adani may trim its capex in some businesses. (chanakyanipothi.com)
>>Adani bonds hit distressed levels: Trace Data
According to Trace Data, the bonds of firms related to Gautam Adani’s flagship Adani Enterprises Ltd plunged to distressed levels after the company pulled a large FPO, the serious fallout from a short-seller’s research report that accused the group of fraud.
FINRA provides real-time and historic data for most TRACE-eligible securities to members and any others.
Bonds issued by Adani Ports & SEZ Ltd. and Adani Green Energy Ltd dropped the most in global secondary trading on Wednesday. Some bonds of both of the Adani companies currently yield more than 30% in secondary markets, much above the average investment grade yield of 4.96% and junk bond yield of 8.14%.
Adani Ports’ 3.375% bond due July 2024 tumbled more than 20 cents on the dollar to 69.75 cents in investment-grade secondary trading, according to Trace data. The loss was the biggest in global trading Wednesday, while at least four other Adani Ports bonds hit distressed levels, falling to 69 cents or lower.
Adani Green Energy’s 4.375% bond due Sept. 2024 declined more than 12 cents on the dollar to 66.75 cents in high-yield secondary trading, according to Trace data.
>>US lender Citigroup’s wealth unit stops margin loans on Adani securities
Citigroup Inc.’s wealth arm has stopped accepting securities of Gautam Adani’s group of firms as collateral for margin loans as banks ramp up scrutiny of the Indian tycoon’s finances following allegations of fraud by short seller Hindenburg Research.
“In recent days, we have seen a dramatic price drop of Adani issued securities,” Citigroup said in an internal memo seen by Bloomberg News.
The move to restrict lending comes after a similar change at Credit Suisse Group AG, as Adani’s beleaguered empire becomes further engulfed in crisis.
The US lender’s move to restrict lending comes after a similar change at Credit Suisse Group AG, as Adani’s beleaguered empire becomes further engulfed in crisis.
>>Credit Suisse stops accepting bonds of Adani Group firms.
The Swiss lender’s private banking arm has assigned a zero-lending value for notes sold by Adani Ports and Special Economic Zone, Adani Green Energy and Adani Electricity Mumbai Ltd, reported Bloomberg. Read more..
FTSE Russell says monitoring report relating to Adani.
FTSE Russell, a global index provider, said it was aware of short-seller Hindenburg Research’s report on the Adani Group and associated securities and that it was monitoring the information. The global index publisher said Adani constituents within the FTSE Russell indices will continue to remain eligible in accordance with the underlying index methodologies.
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