Gautam Adani and his family, who are promoters of the Adani Group companies have prepaid $1114 million worth of borrowings raised with pledging of shares of various listed entities ahead of the schedule payment in September 2024.
With prepayment, pledged shares in Adani Ports & Special Economic Zone, Adani Green Energy and Adani Transmission will be released by the lenders.
Following this, 168.27 million shares (or 12 per cent of the promoters’ holding) will be released in APSEZ, 27.56 million shares (about 3 per cent) in AGEL and 11.77 million shares (1.4 per cent) in ATL will be released. As on December 2022, promoters held 65.13 per cent shares in APSEZ, of which 17.31 per cent or 243.58 million shares were pledged. This will now reduce to 5.31 per cent. In AGEL, of the 60.75 per cent promoter holding, 4.36 per cent (or 41.96 million shares) was pledged, which will not stand at 1.36 per cent. And for ATL, of the total promoter holding of 74.19 per cent, 6.62 per cent (54.83 million shares) was pledged, which will reduce to 5.22 per cent.
The move is aimed at scotching fears of investors amidst rout in the companies’ stocks after a damaging report published by the U.S. short seller Hindenburg Research which raised concerns about the “substantial debt” of the group entities.
In a statement; the company said, “in light of recent market volatility and in continuation of the promoters’ commitment to reduce the overall promoter leverage backed by Adani listed company shares.”
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“This is in continuation of promoters’ assurance to pre-pay all share-backed financing,” the statement said further.
In its scathing report dated January 24, Hindenburg Research had accused the Ahmedabad based group of “stock price manipulation by using shares as collateral.”
“Equity share pledges are an inherently unstable source of lending collateral because if share prices drop, the lender can make a collateral call,” the report stated.
Following the report, shares of its listed entities nosedived, wiping out the conglomerate’s market capitalisation by more than 50%.
