Adani Enterprises shelves $122 million bond plan: Report

Adani Enterprises Ltd has shelved a plan to raise as much as 10 billion Indian rupees ($121.65 million), Bloomberg News reported on Saturday.

A Hindenburg Research report last week accused the Adani Group of stock manipulation and unsustainable debt.

Adani Group, one of India's top conglomerates, has rejected the criticism and denied wrongdoing in detailed rebuttals, but that has failed to arrest the unabated fall in its shares.

In the latest sign of the crisis widening, India's ministry of corporate affairs has begun a preliminary review of Adani Group's financial statements and other regulatory submissions made over the years, two government officials told Reuters.

Although shares in Adani companies recovered after sharp falls earlier on Friday, the seven listed firms have still lost about half their market value, totalling more than $100 billion since Hindenburg published its report on January 24.

Moody's warned the share plunge could hit the Adani Group's ability to raise capital, although fellow credit ratings agency Fitch saw no immediate impact on its ratings.

"These adverse developments are likely to reduce the group's ability to raise capital to fund committed capex or refinance maturing debt over the next 1-2 years. We recognise that a portion of the capex is deferrable," Moody's said.

For Adani, a former school drop-out from Gujarat, the western home state of Indian Prime Minister Narendra Modi, the crisis presents the biggest reputational and business challenge of his life, as his firm struggles to assuage investor concerns.

Amid fears the turmoil could spill over into the broader financial system, some Indian politicians have called for a wider investigation, and sources have told Reuters the central bank has asked lenders for details of exposure to the group.

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"Contagion concerns are widening, but still limited to the banking sector," Charu Chanana, a market strategist with Saxo Markets in Singapore, said on Friday.

The Reserve Bank of India said the country's banking system remains resilient and stable. State Bank of India said it was not concerned about the exposure to Adani Group, but further financing to its projects would be "evaluated on its own merit".

Adani Enterprises shares closed 1.4% higher, after earlier slumping 35% to hit their lowest since March 2021. That low took its losses to nearly $33.6 billion since last week, a 70% fall.

Shares fell 5% in Adani Total Gas, a joint venture with France's TotalEnergies, which said its exposure to Adani companies was limited.

Adani Ports and Special Economic Zone was up 8%, while Adani Transmission and Adani Green Energy were both down 10%.

"There is a risk that investor concerns about the group's governance and disclosures are larger than we have currently factored into our ratings," S&P said, as it cut its outlook on Adani Ports and Adani Electricity to negative from stable.

India's divestment secretary Tuhin Kanta Pandey told Reuters that Life Insurance Corp (LIC) shareholders and customers should not be concerned about its exposure to the Adani Group.

State-run LIC has a 4.23% stake in the flagship Adani Enterprises, while its other exposures include a 9.14% stake in Adani Ports.

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