Adani Group’s fundraising prospects have been questioned after serious allegations of bribery and fraud under US laws. Following these allegations, Adani Green Energy has halted plans to issue $600 million in bonds.
However, experts believe that the Adani Group can get through this difficult phase. Adani Group stocks have seen a sharp decline, with Adani Enterprises falling 22% to be the most prominent.
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Kranthi Bathini, Equity Strategist, WealthMills Securities said, “There will be definitely an impact on fundraising activity. However, Adani Group has experience in navigating tough times.
This will definitely sail through, given the business model they enjoy in terms of long-term cash flow is concerned. The lending rates may go up for Adani Group,
which may impact their margin in the short- to medium-term. However, they have a strong Ebitda to meet any type of short-term liquidity requirements are concerned.”
“Adani Group is best suitable for investors who have high-risk appetite.
Investors can zero in on stocks like Ambuja Cements and Adani Ports for a longer term perspective,” Bathini said.
Meanwhile, the spokesperson of Adani Group stated that the allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless.
“In light of these developments, our subsidiaries have presently decided not to proceed with the proposed USD-denominated bond offerings,”
Adani Group said in a regulatory filing.
Following the development, the combined market capitalisation of Adani Group companies plunged by Rs 2 lakh crore to Rs 12 lakh crore on November 21.
Shares of Adani Enterprises tanked 22%, while Adani Energy Solutions slipped 20%. Adani Green Energy settled 18.80% lower at Rs 1,146.40.
Adani Power and Adani Total Gas declined 9% and 10%, respectively. On the other hand, the benchmark equity index BSE Sensex fell 0.54% to 77,155.
Meanwhile, shares of Australia-listed fund manager GQG Partners—which invested heavily in the Adani Group after the Hindenburg crash—led by Rajiv Jain, saw its stock tumble 20%. It held more than 1% stake in Adani Enterprises, Adani Ports, Adani Energy Solutions and Adani Green Energy as of September
He has 18 years of experience in journalism. Currently he is the Editor in Chief of Samar India Media Group. He lives in Amroha, Uttar Pradesh. For contact samarindia22@gmail.com