New Delhi: Stock exchanges NSE and BSE on Tuesday, March 29, sought clarification from Adani Enterprises after a news report claimed the conglomerate had not paid all its loans against promoters’ shares.
The report by The Ken triggered a sell-off on Tuesday that made the company lose $4 billion, Forbes reported. Adani Enterprises lost about 7% in value and six of the ten listed companies fell around 5%.s
The report raised questions on whether Adani Group had actually repaid debt totaling $2.15 billion.
If the loans have indeed been fully repaid, as claimed, why haven’t the promoters and lenders disclosed the release of all pledged shares? As per the law, banks and listed firms are obligated to disclose to stock exchanges the release of shares upon repayment of debt, The Ken reported.
Neither banks nor listed Adani companies have made disclosures to stock exchanges regarding the release of Adani companies’ pledged shares, the report said.
However, The Ken’s story was updated on March 29 with the Adani Group’s statement saying, “As per the present rules, any share pledge or release is automatically reported by system driven disclosure (SDD) mechanism of the depository participant, and no separate filing is required to be made.”
The report added that the BSE website reflected the updated SDD details pertaining to Adani Enterprises, Adani Green Energy, Adani Transmission and Adani Ports. However, the time stamp for “exchange broadcast date and time” for these latest disclosures is post 5.30 pm on 28 March. The Ken’s story was published 9.5 hours earlier, at 8 am on the same day.
The Ken argued, citing regulatory filings, that banks have not yet released a significant portion of Adani’s listed shares that the company had borrowed against, indicating that only a partial loan repayment was made to avoid pledging more shares, and this has been “misrepresented in publicity material”.
Also read: Questions SEBI Needs to Ask Adani Group, Now That It Is Owning Up to Brother Vinod
Adani Group’s chief financial officer Jugeshinder Singh rejected the media outlet’s report on Twitter, claiming that “all margin loans of the promoters have been paid in full.”
Deliberate misrepresentation ( and if i speculate out right lies) of @TheKenWeb (@SudzzBTS and @nimishshp) they know that relevant exchanges will update end of quarter. The deliberate subterfuge will be clear to all once exchanges update the data post end of quarter. https://t.co/glZbSsC83X
— Jugeshinder Robbie Singh (@jugeshinder) March 28, 2023
Meanwhile, the Economic Times reported that the group is negotiating with lenders to extend the tenor of its $3 billion bridge loan from the existing 18 months to a period of five years or beyond.
Separately, ratings agency Fitch has said that two Adani Group subsidiaries – Adani Transmission Limited and Adani Ports and Special Economic Zone – are exposed to heightened contagion risks as a result of governance weakness at the conglomerate’s level. It added that this could affect the financial flexibility of the two firms, Reuters reported.
Three out of seven Adani stocks ended in the red on Wednesday, March 29, on the BSE.
Adani Enterprises was up 8.75%, Adani Ports 7.25%, Adani Power 4.98%, and Adani Wilmar 5%.
Adani Transmission was down by 1.33%, Adani Green Energy 4.45%, and Adani Total Gas 4.28%.