Adani Ports and Special Economic Zone (APSEZ), a subsidiary of the Adani Group, has repaid a loan of Rs 1,500 crore to SBI Mutual Funds and plans to repay another Rs 1,000 crore in March as part of its comeback strategy, news agency PTI reported.
The company's move to repay the loan and commit to further repayment is a part of its plan to rebuild confidence among investors and lenders after a sellout was triggered by a report by US-based Hindenburg Research, alleging accounting fraud and stock manipulation by the conglomerate.
The PTI report quoted a company spokesperson as saying that the prepayment was made from the existing cash balance and funds generated from business operations. This underscores the confidence the market has placed on the group's prudent capital and liquidity management plan, the spokesperson added.
Also read | Nation needs to embrace compassionate capitalism, says Narayana Murthy
The Adani Group has been on an overdrive to address investor concerns around debt and has already engaged Kekst CNC as a global communications advisor to help change the narrative building in international media. It has also engaged American law firm Wachtell, Lipton, Rosen and Katz to fight back against the short seller's allegations.
The Adani Group's gross debt stood at Rs 2.26 lakh crore as of September 2022, and it had cash of Rs 31,646 crore. The conglomerate is hoping to claw back the narrative with payback and calm jittery investors and lenders who were spooked by the allegations of accounting fraud and stock manipulations. The firm has called off a plan to acquire a coal plant of DB Power for over Rs 7,000 crore and is drawing up a roadmap detailing the repayment schedule of existing debt.
APSEZ recently announced its plan to repay Rs 5,000 crore debt in the financial year starting April, and the group would also repay a USD 500 million bridge loan due next month. Adani Green, according to Bernstein Research, is capable of paying off all its debt of Rs 22,000 crore due in the financial year ending in March 2025, if it divests some renewable energy assets, seeks fresh equity capital from existing investors, or cancels some planned projects and avoids bidding for new ones. However, a group spokesperson has termed questions over the group's ability to fund projects and refinance debt as "unfounded speculation."
Also read | Chinese city pours $29 bn to build chips as India, US eye semiconductor dominance
The Adani Group has also been impacted by Moody's Investors Service downgrading the rating outlook for four of its companies to negative from stable. Earlier this month, French oil major TotalEnergies said it would wait for the result of an independent audit before proceeding with investing in Adani Group's USD 50 billion plans to make green hydrogen.
The conglomerate is taking steps to address the allegations and is hoping to regain the confidence of investors and lenders. It remains to be seen whether these efforts will be sufficient to overcome the negative perception created by the Hindenburg Research report and the subsequent sellout.
