MUMBAI: Shares in the flagship firm of troubled Indian conglomerate Adani rocketed as much as 20 per cent on Tuesday (Feb 7), making up some of the huge slump suffered since last month.
The group owned by tycoon Gautam Adani lost around US$120 billion in value after claims of accounting fraud were levelled by short-seller US investment group Hindenburg Research on Jan 24.
The slide has raised concerns about the group’s ability to raise fresh financing to pay down its debts. It cancelled a share sale, and reportedly also a bond issue, last week.
But Adani said Monday it was repaying early loans worth US$1.1 billion, in a move meant to reassure investors.
Adani Enterprises, the group’s flagship firm, soared on Tuesday, with trading suspended three times as they went up 20 per cent.
They pared back some of the gains after transactions resumed, but were still up by around 15 per cent in late morning trade.
Other group companies were mixed, with Adani Transmission and Adani Wilmar both limit-up 5 per cent, and Adani Total Gas limit-down to the same extent.
Hindenburg accused Adani of “brazen stock manipulation and accounting fraud scheme” in “the largest con in corporate history”.
Adani artificially boosted the share prices of its units by funnelling money into the stocks through offshore tax havens, the document said.
Adani benefited from what it called a “decades-long pattern” of government leniency, and that “investors, journalists, citizens and even politicians have been afraid to speak out for fear of reprisal”.
The company has rejected the claims as a “maliciously mischievous” reputational attack.
The loan repayment announcement came as The Economic Times newspaper reported that Britain’s Standard Chartered had joined Swiss banking giant Credit Suisse and Citigroup in the United States in halting the acceptance of Adani bonds as collateral for loans it advances to private banking clients.
