NEW DELHI: Adani Group put up millions of dollars worth of shares to maintain its collateral cover on a US$1 billion loan after a steep selloff in shares across the conglomerate, according to people familiar with the matter.
Adani on Friday added about US$300 million worth of shares for a loan made by a group of banks including Barclays Plc, one of the people said, asking not to be named discussing internal matters.
The conglomerate has a dedicated basket of US$2.5 billion in shares of different units that is set aside in case they are needed for such top-ups during price fluctuations, the people said. The loan was extended with shares pledged at 2.5 times the borrowed amount and the trigger for top-up was 2 times, the people added.
A Barclays spokesperson in Mumbai declined to comment. Adani representatives did not respond to requests for comment.
The corporate empire of Gautam Adani, Asia’s richest man, was last week thrown into turmoil after short-selling firm Hindenburg Research issued an investigation alleging fraud. The group, which includes a wide-range of firms such as flagship Adani Enterprises Ltd, on Sunday rebutted the allegations in a 413-page report.
The top up illustrates the importance of Adani Group stabilising the share prices of its various units. The risk would be a downward spiral where more shares are needed as collateral to meet loan agreements.
The group today sold US$2.5 billion worth of shares in a fully subscribed follow-on offering by Adani Enterprises Ltd, potentially easing some of the pressure.