• Friday, March 29, 2024

Business

India’s Adani Group to slow down on deal-making, focus on existing projects: report

Last week, Adani Enterprises, the group’s flagship company, scrapped a proposed acquisition of Macquarie Group’s two road assets worth $375 million.

Chairperson of Indian conglomerate Adani Group, Gautam Adani, speaks at the World Congress of Accountants in Mumbai on November 19, 2022. (Photo by INDRANIL MUKHERJEE / AFP) (Photo by INDRANIL MUKHERJEE/AFP via Getty Images)

By: Shubham Ghosh

Indian conglomerate Adani Group has decided to go slow on acquisitions this year as cost of capital heads north globally, the company has said, indicating a reduced deal-making at the ports-to-power giant which has grown rapidly through acquisition of assets, Reuters reported.

Adani’s listed shares in India have reportedly clawed back some $50 billion (£486 million) in its market capital following a devastating report by US short-seller Hindenburg alleging improper use of tax havens and flagging concerns over the Indian company’s debt levels. Adani rejected the claim as baseless and received investor support since then and repaid debt.

Amid a collapse in debt-financing markets and stock market volatility, merger and acquisition activities have slowed globally and many companies have abandoned proposed acquisitions after global central banks raised rates.

The Adani Group, led by billionaire Gautam Adani, who till recently was among the top three richest persons in the world, saw rapid expansion in recent years with growth also aided by 30 acquisitions across key sectors. They included a $10.5 billion (£102 million) deal to buy cement assets from Swiss giant Holcim and the takeover of Indian TV network NDTV.

“The cost of debt and capital has gone up … This is the first time this is happening in the last five to six years. So this year you will generally see less activity on the M&A side,” Reuters quoted an Adani spokesperson as saying.

Last week, Adani Enterprises, the group’s flagship company, scrapped a proposed acquisition of Macquarie Group’s two road assets worth $375 million (£3.6 million).

Earlier this week, Adani said that it has completed a $2.65 billion (£25.7 million) debt-cutting programme.

The group has planned to focus on existing projects over the next nine months, and ensure funds raised are used for that purpose, the spokesperson said, but stopped short of giving details.

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