Adani Group to tamp down capex roadmap

Conglomerate intends to pay back all of the loans raised against shares

The Adani group plans to trim its capital spending plans while providing more collateral in the T form of stock pledges to lenders after it pulled its *20,000 crore equity fundraising plan last week due to a stock rout set off by Hindenburg Research's fraud allegations against the conglomerate, two people close to the development said.

"At Adani, there is a rethink on the capex. The group may moderate its capex plans in some of the businesses. So, instead of targeted growth over 12 months, they may look at a time frame of 16-18 months for that quantum of growth in certain businesses," said one of the two people, requesting anonymity.

The conglomerate will return to its usual pace of growth once normalcy returns. Meanwhile, the group will use alternative funding channels, including its *28,000-30,000 crore worth of cash from internal accruals, promoter equity funding and private placements to fund projects, the people said.

Adani *57,000-60,000 crore of Ebitda yearly, and out of this, around half is Group generates available to the group as cash, which the group plans to use for capex, working capital requirements and meeting immediate repayments, which are worth around $300 million over the next six months, they added.

On pledges, the move to provide more collateral is after stocks of group companies faced a rout in the market last week after the Hindenburg report levelled allegations of stock manipulation and accounting fraud.

The promoter group's share pledge in Adani Ports, Adani Transmission, Adani Enterprises, and Adani Green stood at 17%, 7%, 4%, and 3%, respectively, as of 31 December, according to company disclosures. These pledges are expected to increase by about 20%, with Adani Ports' share pledge, for example, climbing to 20.6% of the promoter's holdings.