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Image of Indian billionaire Adani: Doubts remain
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DIVYAKANT SOLANKI v EPO
The early repayment of a loan by Indian billionaire Gautam Adani has apparently calmed investors in the Indian stock market somewhat.
According to a recent announcement, Adani and his family repaid a good 1.1 billion US dollars, which would not have been due until September 2024.
Concerns had previously spread that Adani only had limited access to fresh funds.
Shares in companies from his group of companies recovered, above all that of the flagship Adani Enterprises with a plus of around 15 percent recently.
Since the allegations by the US short seller Hindenburg Research around two weeks ago, the losses still add up to around 46 percent.
Hindenburg says it has set itself the goal of tracking down irregularities in companies, for example in accounting, and profiting from the alleged abuses.
Hindenburg had accused Adani of "perhaps the greatest financial fraud in history."
As a result, listed companies from the Indian kingdom had lost the equivalent of more than 100 billion euros in value, and thus more than half of the original market value.
Adani denies the allegations and threatens legal action.
Hindenburg's allegations had broken the already smoldering concerns about the debt-financed rapid expansion of the Adanis Bahn group of companies.
This was reinforced by the halt to the planned sale of new shares last week.
According to information from the Bloomberg news agency, Adani Enterprises stopped a planned bond issue at the weekend.
(Read more about Gautam Adani and the allegations here:
Attack on India's superstar)
Warning against premature optimism
With the $1.1 billion early debt repayment that has now taken place, Adani regains access to stocks that secured the loans.
That could improve the financing options for the Indian overall again.
Recently, some banks stopped accepting the securities of the group, whose businesses range from port operations to power generation, as collateral for customer transactions.
Attention is now directed to the current business figures of Adani's company.
The electricity network operator Adani Transmission reassured investors with a significant increase in profits in the past business quarter, while the port subsidiary Adani Ports failed to meet expectations.
However, an analyst from Bloomberg Intelligence warned against premature optimism with a view to the price recovery of Adani shares.
In addition to the loan repayment, technical factors also played a role after the shares were oversold.
Those interested in buying should therefore wait for a successful test of the recent lows.
The Adani case is now also occupying Indian politics.
Because the group of companies is of enormous economic importance for the country, some observers fear that the crisis could spread to the financial sector.
The connections between Adani and Indian politics are close - accordingly, the entrepreneur interprets the US hedge fund's attack on his empire as an attack on the entire country.
sak/dpa
