Gautam Adani Group invests $13B worth shares in cement firms
Just days after completing the purchase from Holcim Ltd., billionaire Gautam Adani’s company pledged shares worth almost $13 billion in two Indian cement companies, demonstrating the second-richest person in the world’s appetite for finance as his ports-to-power conglomerate develops quickly.
According to separate disclosures made to Indian stock exchanges by Deutsche Bank AG’s Hong Kong branch, stakes in two of those businesses — around 57% of ACC Ltd. and 63% of Ambuja Cements Ltd. — have been encumbered “for the benefit of certain lenders and other finance parties”.
Since the deal is a “non-disposal undertaking,” the shares cannot be sold until the debt is paid off.
The vow comes as worries about the large level of debt throughout the Adani group are raised by the tycoon’s ambitious dealmaking in a variety of new sectors, from green energy to media.
While the company has taken steps to reduce some pledges across its listed organizations, some parts still have high leverage ratios that are exceptional among peer corporations globally.
Following the acquisitions from Holcim earlier this year, which made his conglomerate India’s second-largest cement maker, Adani entered the cement industry. The entrepreneur intends to increase his company’s annual production capacity by 2027.
According to Jefferies Financial Group Inc., the acquisitions provide Adani Group access to around 110 billion rupees ($1.4 billion) in cash with the two listed companies.
The combined company has enough of a “war chest to scale up additional expansions, organically or inorganically,” according to a report by Prateek Kumar, a Jefferies analyst, along with a 200-billion-rupee financial injection from its new owners.
Gautam Adani Group invests $13B worth shares in cement firms
The encumbered holding in ACC and Ambuja is valued at $13 billion as of Monday’s closure. The agreements under which the shares have been pledged include Endeavour Trade and Investment Ltd. and Xcent Trade and Investment Ltd., organizations connected to the Adani Group. India’s antitrust agency, however, gave Endeavour Trade permission to purchase a stake in August.
