Indian promoters starved of capital often pledge their shares to create the foundation of new businesses or infuse equity to expand existing businesses. That’s what billionaire Gautam Adani did with whatever little shares he pledged in his listed companies, where he also faced some margin pressure because of a massive fall in their share prices.
Adani Properties, based in Ahmedabad, is one such little-known unlisted company that has invested in Group businesses.
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This three-decade-old company is one of the promoter group companies that hold investments on behalf of Gautam Adani family in flagship Adani Enterprise, Adani Ports and SEZ, Adani Power, Adani Green Energy, and Adani Transmission.
The size and scale of this unlisted company would dwarf many listed companies in the market. It boasts of operating revenues of Rs 11,144 crore and profits after tax of Rs 4,763 crore for 2020-21. It has a debt of Rs 28,618 crore and a net worth of Rs 41,293 crore. What is interesting is the growth in the balance sheet, which has jumped from Rs 37,446 crore in 2019-20 to a staggering Rs 74,499 crore in 2020-21.
The company’s primary business is the wholesale trading of goods. It also has investments in real estate and financial services via multiple subsidiaries. In fact, it has a record 351 subsidiaries, associate companies and joint ventures.
The list of properties also includes 8.21 lakh square feet of land in Mumbai’s Bandra Kurla Complex. However, this property is pledged against the loan availed by the company. There are many other properties spread across Gujarat and other states.
More recently, Adani Properties was in the news for winning the bid to renovate Dharavi, one of the biggest slum colonies in Asia.
Many in the market speculate that Adani Properties will be a vehicle for meeting any short-term funding needs of the group companies. In fact, the group recently repaid loans totalling $ 1.11 billion in order to release pledged shares in three companies: Adani Green Energy, Adani Ports, and Adani Transmission. It is not known how the promoters raised the resources. “Adani Properties’ strong financials enable the company to raise additional debt resources or monetise part of the assets in the book,” says a banker.
An email sent to the company remains unanswered till the time of publishing this story.
Adani Properites has the acceptance and backing of global bankers. Many have invested in the unlisted company. Big names such as Credit Suisse, Barclays Merchant Bank, Copthall Mauritius, DB International among others recently subscribed to the company’s non-convertible debenture issue.
Adani Properties has Adani Commodities, SB Adani Family Trust and Gautam Adani as its shareholders. Adani Commodities owns 44.11 per cent, SBI Adani Family Trust has 40.30 per cent and the balance of 15.59 per cent is in the name of Gautam Adani.
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