Two Adani Group companies will issue shares in an effort to raise up to $2.5bn, they said in stock exchange filings, in a sign that the company is seeking to return to business as usual after the accusations by New York-based Hindenburg Research in January.
The market turmoil it triggered forced the group to call off a $2.4bn stock offering by flag ship company Adani Enterprises as its share price plunged. At the worst point in the market rout, Adani’s combined stock lost about $150bn in value. Its share price has since rallied, although it remains well below its pre-sell off level.
The board of Adani Enterprises, which includes Adani’s coal trading and airport businesses passed a plan to raise $1.5bn by selling shares. The Adani Transmission also approved an Rs 85bn raise. Since Hindenburg published its report, Adani has tried to reassure investors by cutting down debt, including paying back $2.65bn of share-backed loans, and holding off on non core investment. This week Adani Group said that capital expenditure “in new areas of investment, outside the core, is being re-evaluated in the short term”.
A $1.9bn secondary share sale to US-based investment firm GQG Partners in early March helped boost its stock price. In quarterly earnings this month, Adani Enterprises reported profits after tax had more than doubled to $95mn on the same period last year. But last week global index provider MSCI dropped Adani Transmission and Adani Total Gas, Adani’s city gas business with France’s Total Energies, from its India equities bench mark.