NEW DELHI: Most Adani Group stocks declined after people familiar with the matter said the conglomerate has cut its revenue growth target in half and plans to postpone new capital expenditure in the aftermath of a bruising short seller attack.
Adani Green Energy Ltd., Adani Total Gas Ltd., and Adani Transmission Ltd.. were down by the 5% limit. Flagship Adani Enterprises Ltd. swung between gains and losses.
The group will now aim for revenue growth of 15% to 20% for at least the next fiscal year, down from the 40% growth previously targeted, said the people, who didn’t want to be named as the discussions are private. Capital expenditure plans will also be reduced, they said, as the group prioritizes financial health over aggressive expansion.
“These moves will help the group to preserve more capital and retire debt,” said Sameer Kalra, founder of Target Investing. “This will provide a buffer for a few quarters but headwinds both caused by Hindenburg and slowing global growth remain.”
The the ports-to-power conglomerate is focusing on cash conservation, debt repayment, and recovering pledged shares as it attempts to repair the damage caused by Hindenburg Research’s damning report on Jan. 24. Despite Adani Group’s denial of the American short seller’s allegations of accounting fraud and stock manipulation, the concerns wiped out more than $120 billion from the Adani empire’s market value.
Moody’s Investors Service cut its outlook for Adani Green Energy and three other companies backed by Indian tycoon Gautam Adani, citing the plunge in the conglomerate’s stock market value.