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.
(Bloomberg) — 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.
All six stocks that have the 5% daily limit, including Adani Green Energy Ltd., Adani Total Gas Ltd., and Adani Transmission Ltd., fell by that magnitude. Flagship Adani Enterprises Ltd. ended the day lower by 7%. The declines contributed to a $127 billion wipeout in the group’s market value since Hindenburg Research published its report Jan. 24.
The Adani 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.
Read More: Adani Cuts Growth Target, Capex in Post-Hindenburg Repair Move
“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’s report. It has furiously denied the American short seller’s allegations of accounting fraud and stock manipulation.
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.
–With assistance from Ishika Mookerjee and Ashutosh Joshi.
(Updates price levels.)
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