Adani Group shares tank after report faults debt repayment claims

Questions over whether Gautam Adani-led company Adani Enterprises has repaid debt totalling $2.15 billion led to its shares tanking on Tuesday. On Tuesday, all ten Adani Group listed firms were trading in the red, with Adani Power, Adani Transmission, Adani Green Energy, and Adani Total Gas losing roughly 5 per cent each. 

Adani Enterprises shares were trading 7.53 per cent lower at $1,593.30 a share, while Adani Ports and Special Economic Zone slid 8.89 per cent to $573.20 per share. On the NSE, Adani Power shares declined 5 per cent, Adani Transmission shares fell 5 per cent, Adani Green Energy shares fell 4.93 per cent, and Adani Total Gas shares fell 5 per cent.  

Meanwhile, Adani Wilmar fell 4.99 per cent, NDTV was down 4.73 per cent, ACC fell 4.45 per cent, and Ambuja Cements fell 3.43 per cent. During the day, many of the group enterprises reached their lower circuit limits. 

Tuesday's decline in Adani Group shares resumed after a report appeared on The Ken news website. The article questioned whether the ports-to-power business led by Gautam Adani had repaid its $2.15 billion in debt. 

The report said that regulatory documents indicated otherwise despite the Adani Group's assertion of 'complete' repayment of $2.15 billion in share-backed debt. It said that banks had not released a significant chunk of the promoters' shares it held as collateral, indicating that Adani did not entirely repay the debt. 

In addition, the report stated that the Adani Group has only partially repaid the debt to avoid pledging additional shares and lender action. According to The Ken, banks have only released the pledged shares of Adani Ports and SEZ upon the group's notification of prepayment. "The banks have not released the pledged shares of Adani Green and Adani Transmission even one month after the loan was repaid. This is extremely unusual, as pledged shares are often released promptly following the borrower's loan repayment," it said. 

Considering the Hindenburg report, the Supreme Court has requested that SEBI investigate the situation and determine whether the conglomerate breached market norms. SEBI has been instructed to deliver the report within two months. To protect Indian investors, the court has created a six-member expert committee to assess the existing framework. 

With the release of the Hindenburg report on January 24, the Adani Group has been reeling under the impact, with Gautam Adani Tweeting that the investigations will yield a timely resolution and that "the truth will prevail."