MUMBAI: In perhaps the largest such move in the history of the Indian capital market, billionaire Gautam Adani
has pledged his entire stakes in Ambuja Cements and in ACC, worth about Rs 96,800 crore, with Deutsche Bank’s Hong Kong branch, stock exchange disclosures showed.
Adani owns 63. 2% in Ambuja and 56. 7% in ACC (of which just over 50% is held through Ambuja). Both the pledges, called ‘encumbrances’ in technical parlance, aimed at raising funds, were created on September 15 and the stakes were worth about Rs 96,800 crore on that date. Ambuja and ACC’s shares had closed at Rs 539 and Rs 2,748 on the BSE on September 15.
Adani had acquired Ambuja and ACC through a Mauritius-incorporated entity, Endeavour Trade and Investment, which in turn is owned by another Mauritius-incorporated company Xcent Trade and Investment.
The stock exchange disclosures for both the pledges on Tuesday said Endeavour and Xcent have borrowed under facility agreements dated July 25 and note trust deeds dated September 9 with Deutsche Bank’s Hong Kong branch. Under certain deeds of fixed and floating charge, over 100% shares in Endeavour and Xcent have been created in favour of the bank, it added. According to Sebi rules, listed companies have to disclose any form of encumbrances within seven days of inking such transactions.
Adani had acquired Ambuja and ACC for Rs 51,825 crore, or $6. 5 billion, of which 69% (about Rs 35,885 crore, or $4. 5 billion) was financed through foreign borrowings. His group had said on September 16 that 14 international banks had financed the transaction. The deal marked his foray into India’s cement sector and he plans to double the manufacturing capacity of the cement business to 140 million tonnes from 70 million tonnes by 2027. He will infuse an additional Rs 20,001 crore into Ambuja through Harmonia Trade and Investment — an affiliate of Endeavour — to accelerate expansion. According to Jefferies, Adani gets access to Ambuja and ACC’s $1. 4-billion cash through the acquisition.
The pledge comes at a time when his dealmaking in an array of businesses from green energy to media raises concerns over the high level of debt across his Adani Group, Bloomberg reported. While the enterprise has moved to curtail some pledges across its listed entities, other units continue to have elevated leverage ratios that stand out among peer companies globally, it said.