Adani is a big name globally in the world of business. According to a report by Hindenburg Research, which came out with shocking news of manipulation in the shares last year (2023) by Adani, chaos in the share market was created. The allegations on the Adani Group caused great loss, with the shares falling from more than 19 lakh crore to below 7 lakh crore. However, this crisis allowed the Adani Group to change its strategy and establish its transparency. As per Adani latest news, the Group is making huge investments in different ventures across the globe. These ventures help in the Group’s growth trajectory and boost the country’s economic growth.
Released Shares from 5 Listed Company
According to Adani latest news, the Group has released Rs 26,500 crore pledged shares. Adani Group has released the shares from its five listed companies. This is the fourth year in a row that the Adani Group has released its shares. In the years 2021-2022, the Group released shares of 15,000 crore, whereas in 2020-2021, 1.27 lakh crore shares were released. In 2023-24, Adani Power has pledged a maximum number of promoter shares. After this comes the Adani Port, where 6.14 crore shares were pledged in 2023, out of which 3.72 crore shares have been released that hold a value of Rs 4,989 crores. The shares pledged with Adani Green of 3.17 crore have come down to 90.86 lakh, which means 2.26 crore has been released and holds a value of Rs 4,149 crore. Improved cash flows have allowed the Group to release pledged shares, according to independent market analyst Ambareesh Baliga. Institutions increasing their holding in some of the companies is also a good development, he said.
Improved Cash Flow
The money infusion to release these shares is due to an improvement in the Group company’s cash flow. In February, Adani Group said that its EBITDA increased by 34% in December 2023, reaching Rs 79,000 crores. The profit was 2.5 times more than in 2021. Apart from this, different companies in the Group have received investments of Rs 91,290 crores from international and domestic banks.
“Better earnings are alleviating cash flow challenges, as the group’s size doubles every four to five years,” stated Deven Choksey, MD, DR Choksey FinServ.
They have released debt as a result of this. With the ratio currently at about 2.5 times, the EBITDA to debt is acceptable. In the following two to a half year, as debt decreases along with significant EBITDA growth, lenders globally will probably feel more at ease about making loan extensions. Thus, pledge shares have been released,” he stated.
Sunny Agrawal’s Views On Declined Pledged Shares
The Group had witnessed a decline in the pledged shares in the previous years. SBI Securities’ deputy vice-president and head of fundamental equities research, Sunny Agrawal, views the significant decline in pledged shares over the previous few years as good because it will allay investor concerns over funding. According to Agrawal, the money from the pledged shares may be used to pay off the business’s debt in connection with recent acquisitions like ACC and Ambuja. He thinks the Adani Group’s need for money might decrease if financial needs are met and previous problems are fixed, as per Adani latest news.
Another reason for Adani Group’s improved performance is its win in the Hindenburg fiasco. In January, the Indian Supreme Court granted relief from accusations made by a US short-seller by declaring that the Adani Group would not be subject to additional investigations beyond SEBI’s present oversight. Following the allegations made in January 2023 by Hindenburg Research, SEBI has been investigating Adani for using tax havens and manipulating stock prices. In addition to SEBI’s current investigation, the ruling did not indicate that Adani faced any increased regulatory risk. Despite Hindenburg’s arguments, the court likewise ruled against changing the disclosure requirements for offshore money.
Conclusion
Overall, Gautam Adani has not only been successful in overcoming the crisis of Hindenburg, but has also released pledged shares on a large scale. During this period, there has been a good recovery in the shares of Adani Group Companies, as evident by Adani latest news. The release of pledged shares by the Adani Group represents a multifaceted strategy. Its higher profitability and cash flow indicate better financial health. This enhances company creditworthiness and allays investor fears, especially when combined with lower debt. The money that has been released can also be utilised to pay down debt or make additional investments, which could support economic growth in the future. This action presents a favourable image of the Adani Group’s financial and strategic direction.
