{"id":92747,"date":"2023-02-28T17:10:00","date_gmt":"2023-02-28T11:40:00","guid":{"rendered":"https:\/\/tradebrains.in\/features\/?p=92747"},"modified":"2023-02-28T17:08:08","modified_gmt":"2023-02-28T11:38:08","slug":"biz-adani-debt-3","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/biz-adani-debt-3\/","title":{"rendered":"Adani Group&#8217;s debt concern may be overstated, says proxy advisory firm SES"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-1553918995\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p>With about USD 140 billion in market value of its group companies being wiped off in five weeks, Adani Group needs a third-party audit of accounts to allay fears of shareholders even though the concern over group debt may be &#8220;overstated&#8221;, a proxy advisory firm said.<\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-4095297644\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div><p>&#8220;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,&#8221; SES said in a report.<\/p><p>&#8220;An independent third party confirmation of its accounts would go a long way in establishing and restoring credibility.&#8221; The apples-to-airport conglomerate has been rocked by a damning report by US short-seller Hindenburg Research which alleged &#8220;brazen stock manipulation and accounting fraud&#8221; and use of a number of offshore shell companies to inflate stock prices.<\/p><p>The group has denied allegations, calling them &#8220;malicious&#8221;, &#8220;baseless&#8221; and a &#8220;calculated attack on India&#8221;. But this did not stop a sell-off in shares of 10 listed group companies, with cumulative loss in market value at over USD 140 billion. Most stocks were in green on Tuesday.<\/p><div class=\"trade-content_5\" id=\"trade-1759495422\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p>Stakeholders Empowerment Services (SES), a corporate governance research and proxy advisory firm, said in its view &#8220;group debt concept concern may be overstated since each business (of the group) appears to be independently resilient to muster required cashflows to service debt.&#8221; The 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.<\/p><p>&#8220;With the exception that reputation loss will impact all companies, though in unequal measure on a case by case basis,&#8221; SES said listing out financial details of each of the group companies.<\/p><p>In most cases, it said they had &#8220;adequate cash flow to service debts&#8221; and &#8220;banks have comfortable asset to debt ratio.&#8221; Only Adani Transmission has &#8220;high&#8221; debt-equity ratio but given the fixed return promised from the business of transmitting electricity on power lines, it is not &#8220;any cause of worry.&#8221; Adani Green, the renewable firm of the group, is &#8220;the most leveraged company&#8221; but the company &#8220;should not face any problem&#8221; in servicing debt.<\/p><p>SES said unless the group companies are interconnected in terms of shareholding, as also through intercompany transactions in form of loans\/advances, revenue dependence as also cross holding, group concept should not be applied as far as debt is concerned.<\/p><p>On concerns of pledge of promoter shares, SES said the pledge by any Adani company is 25 per cent of promoter holding, giving a margin of safety of about four times.<\/p><p>On allegations of money laundering via obscured beneficial owners, SES said this was a job for regulators, law enforcement agencies that the government has to decide.<\/p><div class=\"trade-content-10\" id=\"trade-23050515\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_3_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"2969612066\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p>&#8220;SES can only say it is a grey area and unless made crystal clear either by Adanis themselves or the government agencies, this governance overhang or negative perception will remain,&#8221; the report said. PTI ANZ ANZ ANU ANU<\/p><div class=\"trade-after-content\" id=\"trade-4121951576\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>With about USD 140 billion in market value of its group companies being wiped off in five weeks, Adani Group needs a third-party audit of accounts to allay fears of shareholders even though the concern over group debt may be &#8220;overstated&#8221;, a proxy advisory firm said. &#8220;In addition to the response to Hindenburg, who is [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":23765,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1696,31],"tags":[],"class_list":["post-92747","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-action","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - 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