In the report, Bernstein said Adani Group’s debt, pledged shares, valuation and leverage parameters have improved significantly in the two years since the first attack.
January 24, 2023 Serious allegations against Adani Group by short seller Hindenburg, after which the US administration attacked Adani Group on November 21, 2024. Two major attacks in almost two years and Adani Group’s recovery from these attacks. Bernstein analyzed the impact of these two attacks on the Adani Group and explained how the two attacks differed from each other. It outlines how the Adani Group managed risks and made significant improvements.
India Infra: Adani Group – What’s different this time? This report, issued in the name of Bernstein, said that in the two years since the first attack, there has been tremendous improvement in Adani Group’s debt, pledged shares, valuation and leverage parameters. The level of risks compared to previous ones is also assessed.
Bernstein covers three Adani Group companies: Adani Green, Adani Ports and Ambuja Cement. Bernstein has said that even after the recent developments, he has not made any change in the ratings of these three companies of Adani Group. Bernstein has examined Adani Group on several metrics and said that the risks it faced during the onslaught of short sellers have significantly improved.
pledged shares
Bernstein said in his note that there was considerable concern about pledged shares amid allegations against short-seller Hindenburg Research. Now the pledged shares of all the companies have reduced. Bernstein says this is an area where the Adani Group has made significant progress in the last year and a half.
Bernstein said in his report that the pledge in Adani Power has fallen from 25% to 1%, while 17% of Adani Ports’ shares were pledged, which has now reduced to zero. On the one hand, there has been such great success in redeeming the pledged shares, while on the other hand, the promoters’ stake in the entire group has also increased. Particularly in Ambuja Cements, where promoters’ stake increased from 63% to 68% due to warrants.
Adani Group’s debt
Adani Group has also reduced its debt rapidly. Bernstein said in its report that after the short seller incident, the group’s ‘Net Debt to EBITDA’ has improved rapidly, with EBITDA also increasing. The net debt to EBITDA ratio was 4.4 in March 2023, which increased to 2.7 in September 2024. This happened because as the work increased rapidly, the profits also increased. In the last few years, Adani Group has adopted the path of raising money through bonds instead of taking loans from banks.
Loan Repayment (Repayment and Hard Loan)
Adani Green was due to repay a large portion of its debt in fiscal 2015, including a $750 million holdco bond, which fell sharply in the event. Bernstein says the loan repayment schedule is now more balanced. The company has Rs. 5,900 crore in cash, so this does not seem to be a matter of concern this time.
Adani Group shares continue to rise
After the recent attack by the US administration, there has been a tremendous rise in the shares of Adani Group. After the allegations were made on November 21, shares of Adani Group fell, but shares of Adani Group have recovered, rising more than 40% in the last five trading sessions.
On November 22, the market cap of Adani Group fell to Rs 2.5 crore. 11 lakh crore, but the decline in market cap has completely reversed. On November 19, the market cap of 10 companies of Adani Group was Rs 13.15 lakh crore. Today on Tuesday, the market cap has crossed Rs 14 lakh crore.
