Adani’s second major business deal failed after Hindenburg Report

The Adani Group, led by Indian businessman Gautam Adani, failed to succeed in buying energy sector company DB Power for Rs 7,017 crore on Wednesday.

According to the Times of India report, Adani Power, an Adani Group company, signed the documents related to the purchase of this company on August 18 last year.

The deal between Adani and DB Power was approved by the Indian Competition Regulator on September 29 and Adani Group was required to pay the money by October 31, 2022.

This term was extended four times. The latest deadline for payment was February 15, 2023, which ended on Wednesday. Adani Group has given information related to the non-completion of this agreement to the stock exchange.

Adani's energy empire

DB Power has a 1200 MW coal-fired power plant at Janjgir Chapa in Chhattisgarh.

According to the newspaper, missing out on the purchase of DB Power is a major blow to the Adani group, as the purchase of this company would have strengthened Adani Power's position as the largest private producer of thermal power in India's power sector.

This was Adani Group's second largest deal in the energy sector as in 2021 Adani Group bought SB Energy India for Rs 26,000 crore. This development shows how the Adani Group is compromising its rapid growth to manage its financial situation.

Adani Power has thermal power plants in five states with a total capacity of 13.6 GW and a 40 MW solar power plant. But this company has a debt of Rs 36,031 crore till 30th September 2022.

investor challenge

After the report by the American forensic financial company Hindenburg Research, the Adani group is moving away for the second time from any of its agreements. Earlier, the company had decided to return the FPO worth Rs 20,000 crore.

Where, on the one hand, the company is trying to manage its financial health. At the same time, the challenges of investors are not taking the name of reduction.

According to the news published in Bloomberg, Adani Group has designated banks to speak with fixed income investors.

These banks include Barclays Bank, BNP Paribas SA, DBS Bank, Dutch Bank AG, Emirates NBD Capital, ING Group NV, MUFG, Mizuho, SMBC Nikko, and Standard Chartered Bank.

These banks will speak to these investors on February 16 and 21. However, it is not clear which investor concerns will be resolved during this period.

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