Adani Enterprises, Adani Green, Adani Power: Adani group shares are making a comeback. Here's why

Shares of most Adani group companies on Thursday climbed for the second straight day amid reports the group was looking to prepay loans, instilling confidence among investors. A report by ET suggested the Adani Group has received firm commitment for $800 million debt facility, which will be used to refinance the Adani Green Energy's $750 million 4.375 per cent bond due in September 2024. The report suggested the debt facility can finalise the term sheet in next five days.

The report came after Reuters suggested that the group was looking to prepay or repay share-backed loans worth $690 million to $790 million by March-end. The Adani group is holding a fixed-income roadshow this week in Singapore and Hong Kong to shore up investor confidence.

The group chief financial officer Jugeshinder Singh and head of group corporate finance Anupam Misra would be meeting fixed income investors in Singapore and Hong Kong to update them about fundraise plans across businesses, ET reported.

Adani group stocks recover

Shares of Adani Enterprises Ltd rose 7.7 per cent to Rs 1,470. The scrip had rallied 14.22 per cent in the previous session, snapping a seven-day losing run. adanigreen-share-price-364724" target="_blank">Adani Green Energy advanced 5 per cent to Rs 509.80. This scrip was up 5 per cent in the preceding session. adanipower-share-price-364880" target="_blank">Adani Power Ltd, which was up 5 per cent on Tuesday, extended gains. This scrip was up 4.98 per cent at Rs 153.75.

Adani Wilmar Ltd rose 5 per cent to Rs 379.45.Adani Transmission Ltd added 2.40 per cent to Rs 658. Adani Ports Ltd was up 2.06 per cent at Rs 604.80. Adani Total Gas, however, fell 1.93 per cent to Rs 667.05.

Shares of Adani group saw a massive $150 billion in value erosion after a short-seller Hindenburg Research accused the group of accounting fraud and stock manipulation. The group has denied all allegations.

Adani group debt

The Adani group had a gross debt of Rs 2.26 lakh crore as of September 30, according to a stock exchange filing. Total cash and cash equivalents was Rs 31,646 crore. It faces a repayment obligation of Rs 17,166 crore between January 2023 and March 2024.

Valuation guru Aswath Damodaran recently said the Adani group collectively carries about three times as much debt as it should, saying the group is over levered. He, however, said it was bad business practice and not a con.

Also Read: Adani Group overleveraged, carries 3x as much debt as it should, says Aswath Damodaran

Proxy advisory firm Stakeholders Empowerment Services said Adani Group needs a third-party audit of accounts to allay fears of shareholders, even though the concern over group debt may be overstated.

"In addition to the response to Hindenburg, who is not a stakeholder, Adani must care for its stakeholders (investors and lenders) and address all areas of concern," SES said.

"With the exception that reputation loss will impact all companies, though in unequal measure on a case by case basis," SES said listing out financial details of each of the group companies.

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