As per the Bloomberg report, Adani's Mundra power plant has accrued USD 1.8 billion in losses and has more liabilities than assets. The report also said that the company has used more than USD 1 billion in creative debt financing to cover the deficit and reassured investors and lenders that profits will soon come.
The Mundra Thermal Power Plant is an example of this balancing act, where a single asset writedown could have cascading effects, as per report. Experts have said that the debt associated with the plant appears to be designed to protect Adani Power from extraordinary writeoffs, regardless of the unit's losses.
Stocks of the Adani Group suffered on the exchanges after US-based short seller Hindenburg Research issued a long list of accusations against it last month, including fraudulent transactions and share price manipulation. The organisation has denied the accusations and said that it complies with all legal and disclosure standards.
Companies in the Gautam Adani-led conglomerate saw their combined market value drop by as much as USD 153 billion during the Financial crisis, but have recently recovered. The Bloomberg Billionaires Index shows that Chairman Adani's personal wealth has dropped by more than half to USD 49.8 billion.
To convince investors that the company's finances are in order, Adani group management, including group chief financial officer Jugeshinder Singh, held roadshows in Singapore and Hong Kong last month. From March 7 to March 15, these will be expanded to Dubai, London, and the US.
Adani Group has USD 2 billion bonds due for repayment in 2024
ICRA downgrades rating outlook to NEGATIVE for Adani Ports, Adani Total Gas
