Hindenburg impact: Adani Enterprises shelves Rs 1,000-crore bond plan after market debacle

Adani Enerprises Ltd., one of India's largest conglomerates, has shelved its plans to raise $122 million (Rs 1,003 crore) through a bond issue due to the company’s current market rout. The company had planned to raise funds to finance its various projects, such as the construction of a new airport, harbour, power plants and more.

This was supposed to be Adani’s first-ever public sale of bonds and they were already working with Edelweiss Financial Services Ltd., AK Capital, JM Financial, and Trust Capital since December last year. But there has been no work done on the project this month, according to Bloomberg sources.

The Adani Group, which is one of the largest private sector companies in India, has been under tremendous pressure since US-based short-seller Hindenburg Research accused it of stock manipulation and accounting fraud late last month. While the group has vehemently denied the allegations, the stock and bond prices across the group have slipped.

The Adani Group's decision to shelve its bond plan is yet another blow to the company after the company had to abruptly pull a fully subscribed Rs 20,000 crore follow-on public offer of shares after the Hindenburg Research report.

The company has said that it will focus on its ongoing projects and will focus on raising funds through other means, to finance its projects.

"The market rout will likely reduce the group’s ability to raise money for capital expenditure projects or to refinance debt over the next year or two," according to Moody’s Investors Service.

Since January 24, Adani Group companies have lost around Rs 9 lakh crore market cap in the last seven trading sessions till February 3. The total market capitalisation of the Adani Group slipped to Rs 10 lakh crore on February 3 from Rs 19.2 lakh crore as of January 24, the day the report by Hindenburg Research came out.

The damage was so big that Finance Minister Nirmala Sitharaman had to reassure the public on Saturday by saying that the withdrawal of Adani Enterprises' FPO had no impact on the country's macroeconomic fundamentals and reputation.