Business

Adani halves growth target after Hindenburg short seller attack



Gautam Adani’s conglomerate has halved its revenue growth target and plans to reduce new capital spending, according to people familiar with the matter, as the Indian billionaire seeks to rebuild investor confidence. after the short seller’s attack.

For now, the team will be targeting revenue growth of 15% to 20% for at least the next fiscal year, down from the 40% growth initially targeted, who did not wish to be named because Discussions are private said. They said capital spending plans will also be scaled back, as the group prioritizes strengthening its financial health over aggressive expansion.

The change shows how the corporation’s transition from port to power is focused on saving cash, repaying debt and recovering pledged stock as it tries to repair damage from a scathing Hindenburg report. Research on January 24. Although Adani . Corporation refuse Following accusations of accounting fraud and stock manipulation brought by US short sellers, the scandal sparked a stock price crash that wiped out more of the money. 120 billion USD decrease the market value of the Adani empire.

Another said holding on to investments for even three months could save the corporation up to $3 billion – money that could be deployed to pay down debt or increase cash flow.

The group’s plans are still under review and will be finalized in the coming weeks, the source said.

A representative for the Adani Group did not immediately respond to an email requesting comment on the plans to cut revenue targets and delay capital expenditures.

‘Link’

“The size and economic linkages of Adani businesses make it appropriate to discuss any drop in group investments that could have consequences for the economy as a whole.” Barclays Plc analysts led by Avanti Save wrote in a report Feb. 10. “The breakout of the situation or a sharp drop in the group’s investments could have an impact on the cycle. India’s investment cycle.”

Chief Financial Officer Jugeshinder Singh told a Local newspaper last month that the Adani group could return to capital spending, as the next share sale of Adani’s flagship company is underway amid Hindenburg’s allegations.

If the next offer is not registered, “we will postpone the growth program for six to nine months and then do it later,” Singh told The Hindu Businessline in an interview published on the 29th. January. The sale takes place remove three days later, between pressure from investors.

The retreat is a significant turning point for a tycoon that has been on the verge of rapidly expanding — and heavily indebted — over the past few years, and reflects the significant impact Hindenburg’s assault had on for the corporation.

The first-generation entrepreneur, who started with an agribusiness in the 1980s, quickly built an empire that now spans ports, airports, coal mines, power plants and utilities. Over the past few years, it has penetrated green energy, cement, media, data centers and real estate, exerting considerable leverage in a way that has frighten Some people monitor credit.

Soothe concerns

In the days following the stock crisis caused by Hindenburg, Adani and his firms worked to assuage investor and lender concerns.

On February 1, leading company Adani Enterprises Ltd. shelf offer to buy the next $2.5 billion in stock – even though it was fully subscribed the day before – as the tycoon seeks to prevent Market-driven losses confused his investors amid a relentless sell-off in stocks. A few days later, the company canceled a sell retail bonds.

Adani Group has been focusing on staving off concerns about its financial health and strengthening sentiment.

On February 6, the group said Adani and his family prepaid loan $1.11 billion to issue committed shares of three companies while the port unit announced plans next Feb. debt payment 50 billion VND rupee debt for the year starting April to boost a key credit index.

group prepaid plan $500 million bridging loan due next month after some banks faltered in refinancing the debt, Bloomberg News Wednesday’s report cites people familiar with the discussions. It was part of a fundraiser last year to fund redemption belong to Holcim Ltd.’s India Cement Assets.

Big Four Auditor

Adani Group plans to hire a Big Four auditor to “perform a joint audit,” the French energy giant Total energy SE said in a statement earlier this month when describing its investments in India. This should help address some of the warning signs raised by Hindenburg.

The Indian group has hired public relations firm Kekst CNC as a global communications consultant, Bloomberg News reported on Saturday citing people familiar with the matter. Kekst, follow it websitewas involved in high-profile litigation, “working against some of the most aggressive partners.”

Efforts to calm investor sentiment boosted stocks early last week, but headwinds remain strong.

Selling off stocks resume after MSCI Inc. cut the number of shares it considers freely tradable for four of the companies – a move that would result in lower weighting in its indexes. Moody’s Investors Service on Friday cut its prospects because Adani xanh Green Energy Ltd. and three other group companies cite stock buying habits.

The SBICaps trustee said in a notice sent to Indian exchanges late Friday, “for the benefit of the lenders” of Adani Enterprises, more shares in three of the Group’s companies. Adani’s union was pledged.

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