Adani Group pledges $13 billion worth of shares of Ambuja and ACC

21 Sep 2022 , 08:06 AM

Just days after completing the purchase from Holcim Ltd., billionaire Gautam Adani’s company pledged shares worth almost $13 billion in the two Indian cement companies.

According to separate disclosures made to Indian stock exchanges by Deutsche Bank AG’s Hong Kong branch, stakes in two of those businesses – around 57% of ACC Ltd. and 63% of Ambuja Cements Ltd. – have been encumbered “for the benefit of certain lenders and other finance parties.”

Worries are being raised about the large level of debt throughout the Adani group are being raised because of ambitious dealmaking in a variety of new sectors, from green energy to media. While the company has taken steps to reduce some pledges across its listed organizations, some parts still have high leverage ratios that are exceptional among peer corporations globally.

Following the acquisitions from Holcim earlier this year, which made his conglomerate India’s second-largest cement maker, Adani entered the cement industry. The entrepreneur intends to increase his company’s annual production capacity by 2027.

The encumbered holding in ACC and Ambuja is valued at $13 billion as of Monday’s closure. The agreements under which the shares have been pledged include Endeavour Trade and Investment Ltd. and Xcent Trade and Investment Ltd., organizations connected to the Adani Group. Endeavour Trade gained the license from India’s antitrust office in August to purchase a share in Holderind Investments Ltd., a holding company domiciled in Mauritius that houses the India division of Holcim.

Cement inventories in India have increased as a result of Adani’s entry into the cement industry and the recent softening of commodity prices. Since news of Holcim’s sale in May, shares in ACC and Ambuja have increased by 29% and 60%, respectively.

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