Adani Group promoters likely to reduce holdings to create additional liquidity: Report

By India Today Business Desk: Over the past few months, promoters of Adani Group have reduced a significant portion of their holdings in group companies following the stake sale to US-based boutique investment firm, GQG Partners. A report suggests that Adani Group promoters may continue to decrease their holdings in the coming months.

The objective behind this move, as reported by The Economic Times, is to create a liquidity buffer that can be utilized for equity infusion in various units and to explore new opportunities. The report highlights discussions with other global investors about the potential further reduction of holdings.

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One person quoted in the report mentioned that the promoters have “in principle” decided to trim their stakes in different listed group companies through a combination of primary and secondary stake sales.

According to the source quoted in the report, building cash reserves is considered the most suitable strategy given the uncertain global investment environment.

Talks with several investors are currently underway, and it is expected that the next transaction involving a West Asia-based fund will be announced by September.

As of now, there has been no official confirmation from the Adani Group.

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The report also emphasizes that the group maintains its focus on infrastructure assets and green energy projects.

It is worth mentioning that Adani Group promoters reduced their stakes after selling shares worth approximately $3 billion to GQG Partners in multiple transactions. The promoter entity, Fortitude Trade and Investment, sold its entire 3.04 per cent stake in Adani Transmission for around Rs 2,665 crore through bulk deals.

Following the investment by GQG Partners, the promoters repaid $2.15 billion worth of loans that were secured by pledging shares in listed firms. With most pledged shares now released, the promoters have shifted their focus to building a liquidity buffer, according to the individuals quoted in the report.

The Adani Group took swift action to reduce debt and raise additional capital as part of damage control after being targeted by a scathing report from US short-seller Hindenburg Research.

Also Read | Adani Group shares tumble after reports of US regulatory scrutiny

The allegations of stock manipulation and fraud were dismissed by the Adani Group, but they couldn’t prevent a significant decline in market valuation due to the impact on investor sentiment.

Even to this day, most Adani Group companies have yet to fully recover from the fallout of the short-seller’s attack in January.