Adani bonds no good, say Credit Suisse, Citigroup arm

The Citigroup announcement comes close on the heels of Credit Suisse’s lending arm assigning zero lending value to bonds issued by Adani companies, signalling a trend in global lending firms maintaining their distance from Adani Group securities. 

This adds to the woes of the Gautam Adani-backed conglomerate that is currently under a selling spree on the Indian bourses for seven consecutive trading sessions. 

The downfall of the ports-to-power group started after the US-based short-seller Hindenburg came out with multiple allegations against Adani Group on January 24.

According to a Bloomberg report, Credit Suisse assigned ‘zero lending value’ to bonds issued by Adani Ports and SEZ, Adani Green Energy and Adani Electricity Mumbai on Wednesday.

Earlier, the Swiss-based Credit Suisse was offering a lending value of 75 per cent on the Adani bonds, as per Bloomberg.

This means that clients could hold bonds issued by the Adani firms as collateral and borrow up to 75 percent of the bonds’ value from Credit Suisse.

The reports led to further rout in stock prices belonging to the Adani Group companies, with its flagship firm Adani Enterprises closing 28 per cent lower on the NSE on Wednesday. 

The Adani Group companies were already having a disastrous few days at the markets after short-seller Hindenburg Research published a scathing report on Adani’s alleged market malpractices last week.

The conglomerate reportedly lost over a third of its market capitalisation in the five trading sessions since the short-seller’s report came out.

The report was, however, dismissed by Adani Group as a compilation of misinformation and an attempt to sabotage the FPO plans of its flagship firm. 

The Group, however, announced calling off the $2.45 billion FPO late Wednesday evening, despite securing full subscription earlier in the week.

The company said the call off was done to protect investors from potential losses.