Adani’s world tour seeks to win back debt investors’ faith

By Chanyaporn Chanjaroen, Archana Narayanan and P R Sanjai

Most Adani Group stocks fell as the embattled Indian conglomerate kicked off a charm offensive with fixed-income investors in Asia, its latest effort to stem the fallout from a short-seller’s attack.

All of the group’s 10 stocks dropped, led by a 10 per cent plunge in flagship Adani Enterprises Ltd., taking its market value wipeout to about Rs 12.75 lakh crore ($154 billion) since US-based Hindenburg Research made allegations of accounting fraud and stock manipulation in a report in January. Adani Group has repeatedly denied those claims.

The continued selling came as the conglomerate began a series of investor meetings at a hotel in Singapore Monday, with help from about a dozen global banks. The company backed by billionaire Gautam Adani will then meet investors at the Barclays Plc office in Hong Kong on Tuesday and Wednesday. Group chief financial officer Jugeshinder Singh and corporate finance head Anupam Misra will attend the meetings.

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The roadshow marks a fresh effort by the ports-to-power conglomerate to restore investor confidence, after adopting a series of rescue moves from cutting expenses to early debt repayment in recent weeks. The steps have helped bring the conglomerate’s key dollar bonds back from distressed levels but failed to ease the stock meltdown.

At the meetings, Singh and his deputy Misra will lead presentations that feature a so-called three-pillar strategy as follows, according to people familiar with the matter who requested anonymity discussing private matters:

-Liquidity planning for the next three years, including a roadmap for repaying or pre-paying maturities via already-underwritten commitments, cash reserves and internal accruals. The executives will also closely examine the financial health of several group firms whose credit rating outlook has recently been downgraded

-Address Hindenburg’s allegations of undisclosed related-party transactions and convince investors that there has been no illegal transfer of money from operating companies to the founding family

-Share steps taken to bolster corporate governance as the group has become more global in nature; this could include recent appointments of global law firms, accountants and crisis consultants

A representative of the Adani Group didn’t respond to Bloomberg News’ email seeking comment.

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At least 200 financial institutions around the world — including the likes of BlackRock Inc., the world’s biggest asset manager — have had exposure to Adani Group’s Rs 66,000 crore ($8 billion) in dollar bonds, according to Bloomberg-compiled data.

The conglomerate has held calls with fixed-income investors on several occasions since Hindenburg’s report was published on January 24. Executives labeled the publication “bogus” in a call with noteholders just a few days later, according to participants.