Business News

Mumbai: The Adani Group, currently facing impropriety allegations involving one entity of its diversified business empire, is now on a stronger footing than when the to-date unproven charges by US short-seller Hindenburg dramatically shrank the conglomerate's market value early 2023, global brokerage Bernstein said, citing both operating and financing metrics.The brokerage referred to a lower quantum of pledged shares, stronger debt coverage ability, and better relative valuations for some of the companies to justify its current assessment of the group, after billionaire founder Gautam Adani and his nephew Sagar Adani were indicted late November on alleged impropriety charges by the US Department of Justice.Bernstein covers three of the group's listed companies - Ambuja Cement, Adani Ports and Special Economic Zone and Adani Green Energy. The brokerage has not changed its rating for these shares after the US regulatory indictment.While the overall debt of the Adani Group at ₹2.79 lakh crore is higher than the ₹2.41 lakh crore as of March 2023, group's net debt-to-EBITDA ratio - a debt servicing metric relative to operating profit - has seen a sharp drop.The group also has higher cash reserves of ₹39,000 crore at the end of September, as against ₹22,300 crore as of March last year, said the brokerage. "If we look at the evolution of share pledges for the group, there has been a dramatic drop across companies: This is one area where the group has taken significant action over the past year and a half," Bernstein said in its report. As compared with 17% in December 2022, none of the promoter's shares are currently pledged in Adani Ports and SEZ. In Adani Power, pledged shares are down to 1% from 25% earlier.At a group level, the next dollar bond is maturing in August 2026; this compares with a repayment due in 2024, the last time the group stocks and listed securities saw a major erosion in value.

Mumbai: The Securities and Exchange Board of India (Sebi) has stopped the initial public offering (IPO) of SME entity Trafiksol ITS Technologies and asked the company to refund the money to investors within one week.The company may approach the market afresh after the ongoing proceedings initiated by Sebi are concluded and subject to any directions issued, the regulator said in an order on Tuesday.In October, Sebi had asked BSE to put the listing of the company on hold, after it received a complaint that the objects of the issue included purchase of software at ₹17 crore from a vendor which had questionable financials and failed to file its annual financial statements with the ministry of corporate affairs.The regulator said purchase of software was a major object of the issue amounting to close to 40% of the issue size.The company in its prospectus disclosed that it planned to buy from a third party vendor an "Integrated Command Control Centre Software (ICCC) to function as the core operational hub for smart cities."The Noida-based company, which is engaged in providing transportation systems and automation solutions for traffic and toll management, had raised ₹44.8 crore at the upper end of the price band of ₹70 per share, through a fresh issue of 64 lakh shares.Sebi's investigation revealed that the third party vendor is a 'shell entity'."I cannot also lose sight of the fact that the funds of the investors who have been allotted shares in the IPO have remained locked-in for close to three months now," Sebi whole-time member Ashwani Bhatia said in his order."Therefore, the issue cannot be put on hold till the other findings of the Investigation are adjudicated".The regulator has asked BSE and the bankers to the issue to oversee the refund process.The interest earned on the issue proceeds should be proportionately refunded to the investors, it said.Once the money is credited to the bank account of the investors, the depositories would have to transfer the shares of the company allotted following the public offering to a separate demat account.Sebi has directed the company to cancel these shares.

Mumbai: Rising incidents of skipped payments and higher risk weighting mandated by the regulator have hit credit card additions at Indian lenders even through the festive season, with analysts anticipating a circumspect approach from banks as pockets of the consumption economy show signs of a demand fatigue.Latest Reserve Bank of India (RBI) data published recently showed credit card additions fell almost 50% year-on-year in October, taking the total card base to about 107 million. Lenders added 786,000 new cards for the month over September."Net new card additions are expected to moderate in the near term due to rising delinquencies in the credit card receivables," said Bunty Chawla, research analyst at IDBI Capital Markets. "Most lenders remain cautious on new card disbursements also due to RBI's risk weight norms. Though we expect card spends to remain range bound in the coming months."In October 2023, lenders had added 1.53 million credit cards. At the end of October 2023, credit cards in use totaled 94.7 million.New cards issuance was majorly led by large players - HDFC Bank, SBI Cards, and ICICI Bank. Together, they added about 600,000 cards. The credit card segment has slowed progressively in the past six months. At the end of October 2024, credit card outstanding expanded 17% versus 26% growth in March 2024. Also, unsecured credit growth has slowed significantly - from more than 25% seen last year to below15% now."In credit cards, the middle-income category is beginning to default, especially after the route of taking personal loans and paying off credit card dues or other dues is disappearing post the RBI clampdown," said Suresh Ganapathy, Head of Financial Services Research, Macquarie Capital. "There is an issue with the middle class, and the urban slowdown is for real."