Adani Group receives $400 million investment from UAE Royals in stake sale

Adani Group companies lost a collective market valuation of Rs 5.56 crore in one week.

New Delhi:

Billionaire Gautam Adani’s beleaguered group is sticking to a $400 million (Rs 3.26 crore) investment in a stake sale of its flagship company by Abu Dhabi’s International Holding Company, amid scant news. A York short-seller has issued a terrible report, which later restored confidence in the conglomerate, which had lost nearly $70 billion in value.

Gautam Adani, 60, who was the world’s third richest person until the day before Hindenburg Research released its report on Jan. I was concerned about the suspicions, but I dropped out. He finished eighth, narrowing the gap to his rival Mukesh Ambani, whom he overtook last April, to just his $4 billion.

His group published a 413-page response to the Hindenburg report late Sunday night in an attempt to restore confidence in its business empire, but it failed to break much of the ice, leaving most of the group’s companies Stocks continued to fall and major dollar-denominated bonds saw fresh declines. Low price on Monday.

US shortseller dismisses accusation that Adani Group cheating report was ‘calculated attack’ against India, obfuscates ‘fraud’ with bloated response that ignores nationalism and key allegations Said he couldn’t.

Hindenburg released the report on January 24th. This is the day his additional share sale of INR 20,000 crore in Adani Enterprise Ltd was opened to investors. According to information available at BSE, anchor investors poured about Rs 600 crore into FPO that day, but the public offering was only 3% by Monday night, representing just 3% of the shares offered. rice field.

The offer closed on January 31st and the largest part of the FPO, the private investor part, has only 4% subscribed.

IHC said it plans to invest around US$400 million in a subsequent stake sale in Adani Enterprises, saying it remains confident in the conglomerate’s fundamentals after the share price rout. “From a long-term perspective, we believe we have strong growth potential and can provide added value to our shareholders,” said Saeed Bassar Shweb, CEO of the company, in a statement.

The IHC is headed by Sheikh Tahnoon bin Zayed Al Nahyan, the United Arab Emirates’ National Security Advisor and brother of the President.

Life Insurance Corporation (LIC) has also issued a separate statement saying its investment in the group is safe. “Current total equity and debt holdings of Adani Group companies is Rs 3,647.478 crore. This was Rs. The total purchase price of the shares was Rs 30,127 crore and the market value at the close of market hours on 27 January 2023 was Rs 56,142 crore.”

However, Punjab National Bank (PNB), an entity of the Adani Group with an exposure of around 700 billion rupees, said it was watching the developing situation closely.

Earlier in the day, Hindenberg responded to a detailed 413-page statement issued by the Adani Group late Sunday, saying it was unable to specifically answer 62 of the 88 questions, referring to the company’s “meteor rise.” with the wealth of Asia’s richest man.”Along with the success of India itself.”

In a statement Sunday evening, the Adani Group referred to Hindenburg as “Manhattan’s Madoff” and said its report was “not an unjustified attack on a specific company, but a testament to the independence, integrity and quality of India, Indian institutions.” , and India’s coming-of-age story and ambitions.”

Hindenberg backed a report alleging “fraud” in India’s second-largest conglomerate, run by the world’s third-richest man at the time, and criticized the Adani Group’s allegations that the report was an attack on India. said he disagreed.

“To be clear, we believe India is a vibrant democracy and a new superpower with an exciting future.

“I also believe that India’s future is being thwarted by the Adani group, who dress up in the Indian flag while systematically looting the nation.” Fraud is fraud,” he said, adding that Adani also committed “serious violations of applicable securities and foreign exchange laws.” Identifying such laws is another serious accusation that we categorically deny. “

Adani’s 413-page response contained only about 30 pages focused on issues related to the report, leaving 330 pages of court records, 53 pages of high-level financial and general information, and ” It consisted of details such as unrelated corporate initiatives. Such as how to promote women’s entrepreneurship and safe vegetable production.

Adani Group said on Sunday evening that the Hindenburg report is aimed at allowing US-based short sellers to crash stock prices and secure profits.

The report comes just as the group’s flagship company Adani Enterprises’ Rs 200 crore stake sale was opened to anchor investors.

“All transactions entered into by the company with entities that are considered ‘related parties’ under Indian law and accounting standards have been duly disclosed by the company,” it said late Sunday.

“This is fraught with conflicts of interest, creating a false market in securities so that Hindenburg, which allows short-selling, can make huge financial gains through illicit means at the expense of countless investors. Hindenburg reiterated that the Adani Group has a shortfall through bonds traded in the United States and derivative products traded outside India.

A Jan. 24 report noted the conglomerate’s “large amount of debt,” including collateral stock for loans. That his Vinod, Adani’s brother, “manages a vast maze of offshore shell entities” that move billions of dollars into group companies without the required disclosure. And the auditor “appears to have little ability to perform complex auditing tasks.”

Hindenburg is known for shorting Twitter with electric truck maker Nikola, but the Adani Group also needs recognition when asked about the origin of billions of dollars drained from an offshore shell entity linked to Vinod Adani. He said he answered no. Know your funding sources.

Vinod Adani is the brother of Gautam Adani.

Separately on Sunday, Adani Group CFO Jugeshineder Singh expressed confidence that Adani Enterprises’ subsequent public offering will go smoothly.

He compared the actions of the Indian investors who participated in the sale to the Jallianwala Bagh massacre in colonial Amritsar.

Asked why the market believed Hindenburg’s report, Singh said, “At Jallianwala Bagh, only one Englishman gave the orders and the Indians fired at the other Indians.” “So you were surprised by the actions of your fellow Indians? No.” April 13, 1919, when General Reginald Dyer ordered about 50 Indian soldiers to shoot unarmed peaceful protesters. , at least 379 people died.

Adani Total Gas shares are down 39.57% since last Tuesday’s close, Adani Transmission is down 37.95%, Adani Green Energy is down 37.93%, Ambuja Cements is down 22.28% and Adani Ports is down 21.55% on BSE. fell.

Over the three-day period, shares of ACC fell 18.47%, Adani Enterprises fell 16.38%, Adani Wilmar fell 14.25%, Adani Power (14.24%) and NDTV (14.22%).

Group companies lost a total of more than Rs 5.56 crore in market valuations from Tuesday to Monday last week.

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