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This year is not going well for the Adani Group doing business in various sectors. The companies of Gautam Adani, the country’s second richest person, have been facing constant setbacks since the beginning of the year. First the Hindenburg Adani Report targeted the Adani group and now The Ken Adani Report and the rating agency Fitch report have come to add to the trouble.
These questions in Ken’s report
The Ken report raised questions that the promoters of the group might not have repaid the loan installments against the pledged shares. This report had a bad effect on the shares of Adani Group. This put a brake on the rally going on in the shares of Adani Group for almost a month. After the report came out, all the 10 shares of Adani Group have gone down for two consecutive days. Due to this report, the mcap of Adani group companies decreased by more than $ 01 billion in just two days.
Adani group rejected
On the other hand, the Adani group has outrightly rejected the questions raised in Kane’s report. The Adani group says that wrong claims have been made in Kane’s report. Adani Group says it has fully repaid a margin-linked share-backed loan of $2.15 billion. The group issued a statement in this regard and said that the pledged shares of group companies Adani Green, Adani Ports, Adani Transmission and Adani Enterprises have reduced.
pledged shares reduced
If you believe the company’s statement, the pledged shares in Adani Green, where they were 4.4 per cent on December 31, 2022, came down to 3.5 per cent on March 27, 2023. Similarly, the pledged shares of Adani Ports declined from 17.3 per cent to 4.7 per cent, Adani Transmission from 6.6 per cent to 3.8 per cent and Adani Enterprises from 2.7 per cent to 0.6 per cent. The group has also claimed that no loans have been taken by pledging shares of any operating company after the Hindenburg report.
Fitch gave this statement
After Kane, rating agency Fitch also increased the problems of Adani group. Fitch says that two companies of the Adani group are in trouble. According to the agency, Adani Transmission and Adani Ports are at risk due to weaknesses in company operations at the sponsor level of the group. The financial flexibility of these companies can be adversely affected. However, Fitch has retained the BBB negative ratings on both the companies. Fitch had earlier retained the rating of Adani Transmission on 23 February.
This was the attitude of other agencies
Before this step of Fitch, other rating agencies have also cleared their stand regarding Adani Group. Rating agency Standard and Poor’s i.e. S&P Global Ratings had recently indicated that negative steps could be taken regarding the rating of Adani group companies. The rating agency had clearly said that if it finds any serious irregularities, it can take negative rating action on Adani group companies. On February 11, Moody’s downgraded the rating outlook of the group’s flagship company Adani Enterprises, including Adani Total Gas, Adani Transmission and ACC.
The impact of the Hindenburg report did not go away
Kane’s latest report and Fitch’s statement have come at a time when Adani group companies have not yet recovered from the impact of the Hindenburg report. American short seller firm Hindenburg had issued a report against the Adani group on 24 January. Hindenburg had made several serious allegations against the Adani group, including wrongly raising the price of its shares. After the release of the Hindenburg report, the value of Adani Group’s shares fell by up to 80 percent. The combined market cap of the 10 listed companies of the group decreased by Rs 12.06 lakh. Due to this, Gautam Adani’s net worth had reduced to just less than $ 40 billion and he had to suffer a loss of more than $ 80 billion in just one month.
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