The share price of Adani Group companies has spiralled in the past year and this has played a major role in making Gautam Adani the second richest person in the world. The completion of the acquisition of Ambuja Cement and ACC helped the conglomerate overtake the Tata Group in terms of market capitalization.
No-poaching pact
The Adani Group has entered into a no-poaching pact with Mukesh Ambani-led Reliance Industries. This agreement will prevent employees from both groups from joining each other and will prevent a talent war in media and new energy businesses.
Pledging of shares
The business tycoon’s company pledged shares valued at about $ 13 billion in Ambuja Cements and ACC, days after it completed the acquisition from Holcim Ltd. This transaction is a non-disposal undertaking, which means that the shares cannot be sold until the debt is repaid.
Concrete growth in the cement business
After the acquisition of Ambuja and ACC, the newly formed board has approved an infusion of ₹ 20,000 crores into the company by a preferential allotment of warrants. Experts see this as a clear intent to acquire more cement companies, especially the smaller ones. However, Ultra Tech cement holds the leading position even now.
Steel Sector Foray
The Adani Group is all set to foray into the steel sector. The group is reportedly planning to bid for the state-owned Rashtriya Ispat Nigam slated for disinvestment in January 2023. Experts expect the group to be more aggressive than legacy players like Tata Steel, JSW Steel, Arcelor Mittal and Nippon Steel.
Concerns about debt
CreditSights, a unit of Fitch, the global rating s giant had called the conglomerate deeply overleveraged. Later, a difference was found and the calculations were reconciled with those presented by the Adani Group. However, analysts are concerned about the group’s debt situation. In fact, Adani Ports’ dollar bonds have dropped more than Indian peers on concern about the group’s debt, and its notes due in August 2027 fell to an all-time low this week.
Written by Simran Bafna
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