Adani Group firms pledge shares for lenders of AEL: SBICAP Trustee

Three Adani group companies have pledged shares for lenders to the Indian conglomerate's flagship Adani Enterprises, which pulled a $2.5 billion share sale during a recent market rout, the debt trustee firm said.

Adani Ports and Special Economic Zone, Adani Transmission Ltd and Adani Green Energy Ltd pledged shares to SBICAP Trustee Co, the firm said in Friday filings to the Bombay Stock Exchange.

The trustee, a unit of India's biggest state lender, State Bank of India, said it had pledges for shares worth 1% of Adani Ports, up from 0.65%, for 0.55% of Adani Transmission, up from 0.44%, and for 1.06% of Adani Green, up from 0.68%.

SBICAP Trustee said it had received the pledges in its capacity as "security trustee" of the lenders of Adani Enterprises.

Group companies controlled by billionaire Gautam Adani have lost more than $100 billion in market value since Jan. 24, when a U.S. short seller issued a scathing report on the apples-to-airports conglomerate.

Hindenburg Research accused the group of stock manipulation and improper use of offshore tax havens. The group has rejected the firm's findings and denied any wrongdoing.

India's market regulator, the Securities and Exchange Board of India, is investigating the Adani group's links to some of the investors in the conglomerate's aborted share sale, sources told Reuters on Friday.

Fitch estimates that loans to all Adani group entities account for 0.8% to 1.2% of total lending by Indian banks rated by the agency.

State Bank of India's exposure to the group was 0.9% of its loan book, or around 270 billion Indian rupees ($3.3 billion), Chairman Dinesh Kumar Khara has said.

The Adani exposure of Indian banks is not enough to affect their credit profiles, two global rating agencies have said.

"As part of the Standby LC facility of $300 million, provided by SBI for Adani group's Carmichael project in Australia, there is an additional collateral by way of pledge of shares of 3 group companies. The required collateral coverage of 140% is reviewed as at the end of each month and any shortfall on account of MTM is required to be topped up. There have been a top up each in the months of June and July 2022 and the third such top up was done on 8th Feb 2023 after a review as on 31st Jan 2023, the SBI statement said.

"Being the Security Trustee, SBI Cap Trustee Company, is required to file the same with SEBI and it is being complied with by them each time whenever there is a change in number of shares pledged."

"With this latest tranche, the % 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 is clarified that such a share pledge is only as additional collateral security over and above the project assets and no additional finance is extended by SBI against such shares pledged", statement further added.