Adani to repay $1.1bn share-backed loan early in bid to stem crisis

Indian tycoon Gautam Adani and his family have posted funds to repay a $1.1bn loan backed by shares in several of his companies, as the billionaire battles to arrest a crisis that has wiped more than $100bn off the value of his business empire.

One of India’s most powerful moguls, whose businesses span ports to energy to airports, Adani has been left reeling since US short seller Hindenburg accused the group of stock price manipulation and accounting fraud. Adani has denied the allegations.

In a statement on Monday, the Adani Group said that its founder and his family — majority shareholders in the Adani companies and known as promoters in India — had posted the funds to repay a $1.1bn loan that was not due until September 2024.

The loan was from a series of banks including Citibank, JPMorgan, Deutsche Bank, Barclays and Japan’s SMBC Group, an official for the Adani Group told the Financial Times. All the banks declined to comment.

The pressure on Adani’s 10 listed companies has been intensified by the knowledge that shares in the groups were pledged as collateral for loans. Bombay Stock Exchange data shows that the SB Adani Family Trust pledged stock as collateral across several of the listed companies.

The Adani Group had not responded to questions about which specific entity had received the loan by time of publication.

Adani said that early repayment of the loan would release 168mn shares in Adani Ports, 27mn in Adani Green Energy and 12mn in Adani Transmission. The share totals accounted for 12 per cent, 3 per cent and 1.4 per cent of Adani’s holding of the listed companies, respectively.

Samir Arora, founder of investment firm Helios Capital, said that by repaying the loan early Adani was trying to demonstrate the financial strength of his empire.

“He’s showing you I have $1.1bn just lying around to give back to you,” said Arora. “It shows they’re not in so desperate a state”.

While Adani has issued a lengthy rebuttal of Hindenburg’s allegations, that has done little to stem the crisis engulfing the group. Since the allegations were published on January 24, the sell-off in Adani’s listed businesses has lopped Rs9.4tn ($114bn), or about 50 per cent, off their value.

In its statement on Monday, the Indian group said that it was making the repayment early “in light of recent market volatility and in continuation of the promoters’ commitment to reduce overall promoter leverage backed by Adani Listed Company shares”. It…