Three Adani Group enties have pledged additional shares for State Bank of India, days after a scathing report by a US short-seller led to over USD 100 billion loss in its market value, as per stock exchange filings.
These three entities are - Adani Ports and Special Economic Zone (APSEZ), Adani Transmission Ltd and Adani Green Energy pledged shares to SBICAP Trustee Company, a unit of India's biggest lender, SBI.
Shares of the group firms have fallen significantly on the stock exchanges after US-based short-seller Hindenburg Research wrote a negative report about the Adani Group on January 24. Since January 24, the Adani group, owned by billionaire Gautam Adani, has seen its market worth decline by more over $100 billion.
Prior to this, MSCI Inc. stated that it has heard from a range of market participants regarding the determination of the free float and eligibility of particular securities linked to the Adani Group for the MSCI Global Investable Market Indexes (GIMI).
According to MSCI, a security's free-float is the percentage of outstanding shares that are thought to be available for acquisition by foreign investors on public stock markets.
Hindenburg Research accused the group of stock manipulation and improper use of offshore tax havens. The conglomerate has rejected the firm's findings and denied any wrongdoing.
As per reports on Friday, the Securities and Exchange Board of India, India's market watchdog, is looking into connections between the Adani group and some of the investors in the conglomerate's cancelled share sale.
"There is further collateral in the form of the pledging of shares of three group firms as part of the Standby LC facility of USD 300 million issued by SBI for the Carmichael project of the Adani group in Australia. Every month at the end, the 140% collateral coverage requirement is evaluated, and any deficiency due to MTM must be made up. There was a top-up in each of the months of June and July 2022, and the third top-up was completed on February 8, 2023, following a review as of January 31, 2023 "said an SBI spokeswoman.
SBI Cap Trustee Company, as the Security Trustee, is required to register the same with SEBI, and they do so each time there is a change in the amount of shares pledged. "With this latest tranche, the percentage of shares that is pledged towards this project, aggregates to 1.06%, 1.00% and 0.55% of equity shares of Adani Green, Adani Ports and Adani Transmission, respectively. "
It has been made clear that such a share promise simply serves as further collateral security on top of the project assets and that SBI does not grant financing in exchange for such shares pledged, according to the spokeswoman.
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