Thursday, March 23rd, 2023

The Unfortunate Reality: Why Adani Isn’t the Only Indian tycoon in Trouble

Adani isn’t only the Indian tycoon in trouble; there is another storm brewing. Highly leveraged Indian tycoons are having a rough time. Gautam Adani’s $236 billion infrastructure empire has shrunk by 3/5th in a month. But while his relentless rise in spectacular fall hog headlines, a smaller storm may be preparing for another well-known magnate.

In New Delhi, Anil Agarwal’s once London-listed Vedanta Resources Ltd has a debt including a $1 billion bond due January. The US Federal Reserve was still to begin raising interest rates to manage inflation and Russia’s War in Ukraine has started to send commodities to surge to their best quarter in more than three decades, Agarwal has an idea of merging debt-laden Vedantu Resources with its cash-rich, in its listed Mumbai unit.

Adani Stocks remain under Pressure in the Share market

Indian shares fell down on Monday (27th Feb 2023) with the benchmark Nifty slipping below a key long-term average intraday for the first time in over four months after the US data reinforced fears of a prolonged high-interest rate.

Adani stocks remained under pressure with Adani Enterprises dropping almost 10%. Bajaj Auto shed 5%, UPL 4%, Tata Steel 3%, and Infosys 2.5%. Power Grid and ICICI Bank jumped more than 2% each.

In the next few weeks, it will be crucial for fundraising, Adani’s net debt pile of $24 billion may be three times as large as Agarwal’s, but his bonds are still rated at the lowest reach of investment grade. Vedantu Resources managed to shed its net debt burden of almost $10 billion in March last year to a little under $8 billion. Parent and Majority shareholder is “highly likely” to meet its commitment until September 2023, according to S&P Global Inc. When Agarwal tried to secure his finances for $1.5 billion in loan and bond repayments between September this year and January 2024 that he hit a roadblock.

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