Adani Group to cut capital spending plans after halting $2.5 billion FPO

According to reports, the group may reduce its capex plans for some divisions and pledge more stock as collateral to lenders.

The Adani Group is a leading Indian conglomerate founded by Gautam Adani in 1988. It is a diversified group with businesses in ports, electric power generation, renewable energy, mining, airport operations, natural gas, food processing, and infrastructure.

According to recent reports, the Adani Group is planning to trim its capital spending plans, days after its flagship firm, Adani Enterprises, called off its $2.5 billion follow-on public offering (FPO).This decision was motivated by the Hindenburg Research report, which raised questions about the group’s debt levels and use of tax havens.

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The group may put up increased collateral to lenders in form of stock pledges and reduce its capex plans in some businesses. Additionally, the group is also planning to use alternative funding channels such as internal accruals, promoter equity funding, and private placements to fund projects.

Prime Minister Narendra Modi’s potential involvement in the Adani Group’s recovery, given its importance to the nation’s economy, could help to alleviate the situation.