Proactive Investors - Adani Group has slashed its revenue growth target in half and intends to scale down its capital expenditure plans amid an ongoing crisis for India’s largest conglomerate.
Up to US$120bn has been wiped from Gautam Adani’s industrial empire following the release of a bruising investigation by US short-selling investment firm Hindenburg Research in January.
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Adani Group will now aim for revenue growth of 15% to 20% for the next fiscal year, down from 40%, Bloomberg reported.
Capex reduction could divert essential funds to pay down debt and shore up cash reserves in what will likely be a rocky few months ahead.
The company had already ditched its much-vaunted US$2.5bn share offer marketed towards international investors following the damning investigation, while the prospect of a forced asset sale of Adani’s politically contentious Carmichael coal mine in Queensland, Australia has also been raised.
Concerns are now mounting that the ports-to-power enterprise’s market rout could lead to contagion in the wider Indian economy.
Due to the “scale and economic inter-linkages” of Adani subsidiaries, Barclays (LON:BARC) analysts warned that an investment pullback “could have implications for India’s capex cycle”.
Moody’s Investors Services has slashed its ratings for a number of Adani subsidiaries, with Adani Green Energy, Adani Transmission Step-One and Adani Green Energy Restricted downgraded from stable to negative.