© Reuters. FILE PHOTO: The Adani Group logo is seen on the facade of one of its buildings on the outskirts of Ahmedabad, India, April 13, 2021. REUTERS/Amit Dave
BENGALURU (Reuters) – Hindenburg Research said on Wednesday it is holding short positions in Adani Group companies through U.S.-traded bonds and non-Indian-traded derivatives, sending shares of companies in the Indian conglomerate tumbling.
The short seller said seven Adani-listed companies are 85% down on a fundamental basis due to sky-high valuations and that “key publicly-listed Adani companies have also taken on substantial debt,” which ” It has put the whole group in a precarious financial situation.” .
A spokesman for Adani did not immediately respond to a Reuters request for comment on the report.
The company has repeatedly dismissed concerns about debt. Adani’s CFO Jugeshinder Singh told the media on January 21: “No one has raised concerns with us about the debt. No investor has.”
The group, controlled by the world’s third-richest man Gautam Adani, has long faced concerns about elevated debt and the Hindenburg report comes at a time when Adani Enterprises plans to raise $2.5 billion in the public offering. India’s largest follow-up this week.
Shares of Adani Ports And Special Economic Zone fell 4.8% on Wednesday to their lowest level since mid-July, while Adani Enterprises, the group’s flagship company, fell 2.5% to a 12-week low. .
Adani Enterprises shares rose 125% in 2022, while other group companies, including power and gas units, rose more than 100%.
Adani Group’s total gross debt in the financial year ending 31 March 2022 increased by 40% to Rs 2.2 trillion. CreditSights, part of Fitch Group, last September described the group as “overleveraged” and said it had “concerns” about its debt.
While the report later corrected some miscalculations, CreditSights said it remained concerned about leverage.
Hindenburg is known for shorting electric truck maker Nikola Corp and Twitter, though he later reversed his position on Twitter.
