Indian billionaire Gautam Adani’s conglomerate has organized a site visit for local bond arrangers, according to insiders. The visit comes as the Adani Group prepares to issue up to Rs 150 billion ($1.8 billion) in debt, aiming to address lingering concerns about its corporate governance.
The event took place at Mundra in Gujarat and focused on showcasing the infrastructure of India’s largest private port. During the visit, the conglomerate emphasized its robust financial standing and expansion strategies to the visiting bankers, who were representatives from Darashaw & Co., JM Financial Ltd., Nuvama Wealth and Investment Ltd., SBI Capital Markets Ltd., Tipsons Consultancy Services Pvt., Trust Investment Advisors Pvt., and Yubi Group.
This move by the Adani Group is part of its ongoing efforts to restore market confidence following the fallout caused by the January report from US short-seller Hindenburg Research. The report alleged various instances of corporate misconduct, an assertion that the conglomerate vehemently denied. The site visit indicates that the Adani Group is working to diversify its funding sources by tapping into the local capital market.
The conglomerate is also facing scrutiny from India’s capital markets regulator due to allegations of impropriety and corporate governance issues. The regulator sought a 15-day extension for submitting its report on the matter.
However, the Adani spokesperson did not immediately provide a response to Bloomberg’s request for comments, and the representatives from various financial firms involved either declined to comment or did not respond to email inquiries.
Although it’s uncertain if the site visit will result in any immediate deals, it showcases Adani’s efforts to move beyond the Hindenburg incident and prioritize building trust with influential domestic investment banks. Notably, Adani Enterprises Ltd., the flagship company, recently raised 12.5 billion rupees through the issuance of domestic bonds – its first such offering since becoming the target of Hindenburg’s accusations.
Moreover, discussions are ongoing with global banks to refinance the debt incurred from the purchase of Ambuja Cements Ltd., with potential collective lending of $600 million to $750 million.
Hindenburg Research Report and Aftermath
Hindenburg Research’s report, published on January 24, 2023, accused the Adani Group of fraudulent activities, stock manipulation, and money laundering. The report claimed that the group employed offshore shell companies to inflate revenues, divert funds, and hide debt.
The Adani Group firmly denied these allegations, labeling the report as speculative and misleading. They asserted their compliance with applicable laws and regulations, their strong financial position, and transparent accounting practices.
The Hindenburg report triggered a significant drop in Adani Group shares, wiping out over $100 billion in market value within a month. However, subsequent positive quarterly results and reaffirmed growth forecasts helped some of the group’s companies regain a portion of their losses.
The Adani Group’s site visit to showcase its infrastructure and financial standing to local bond arrangers signifies its ongoing efforts to regain market trust and confidence in the wake of the Hindenburg incident.
