Gautam Adani’s conglomerate has halved its revenue growth target and plans to hold off fresh capital expenditure, people familiar with the matter said, as the Indian billionaire seeks to rebuild investor confidence in the wake of a bruising short-seller attack.
The group now aims for revenue growth of 15 to 20 percent for at least the next financial year, down from the 40 percent expansion originally targeted, said the people, who did not want to be named as the discussions are private.
Capital expenditure plans would also be scaled down, they said, as the group prioritizes bolstering its financial health over aggressive expansion.
Photo: AFP
All 10 stocks in the group dropped yesterday, with the flagship Adani Enterprises Ltd sliding as much as 10 percent. Adani Green Energy Ltd, Adani Total Gas Ltd and Adani Transmission Ltd were each down by the 5 percent limit.
The shift in policy shows how the ports-to-power conglomerate is focused on conserving cash, repaying debt and retrieving pledged shares as it scrambles to undo the damage from a scathing report by Hindenburg Research on Jan. 24.
Even though Adani Group denied the allegations of accounting fraud and stock manipulation levied by the US short seller, the report triggered a stock rout that has wiped more than US$120 billion off the Adani empire’s market value.
Holding back on investments for even as little as three months could save the conglomerate as much as US$3 billion — funds that can be deployed to pay down debt or boost the cash pile, another person said.
The group’s plans are still being reviewed and are set to be finalized in the next few weeks, the people said.
An Adani Group representative did not immediately respond to an e-mail seeking comments on its plan to slash revenue target and delay capital expenditure.
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