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Business

Hindenburg bet against India’s Adani puzzles rival U.S. short sellers

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Feb 1 (Reuters) – When Hindenburg Research revealed a short position in Adani Group last week, some U.S. investors said they were intrigued about the actual mechanics of its trade, because Indian securities rules make it hard for foreigners to bet against companies there.

Hindenburg’s bet has been lucrative so far. Its allegations, which the Indian conglomerate has denied, have wiped out more than $80 billion of market value from its seven listed companies and knocked billionaire Gautam Adani from his perch as the world’s third-richest man. On Wednesday, a $2.5 billion sale of shares by one of its companies Adani Enterprises ADEL.NS was called off.

The short seller has said it held its position, which profits from the fall in the value of Adani Group shares and bonds, “through U.S.-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities.” But it has revealed little else about the size of its bets and the kind of derivatives and reference securities it used, leaving rivals wondering how the trade worked.

“I wanted to short it myself, but I was not able to find a way to do it with my prime broker,” said Citron Research founder Andrew Left, referring to Adani Enterprises and other companies .

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Hindenburg declined to comment to Reuters on the method it used to place its bets against Adani. Adani Group and the stock market regulator the Securities and Exchange Board of India (SEBI) did not respond to a request for comment.

DIFFICULT TO SHORT

Typically, investors who want to bet that the company’s stock will fall borrow shares in the market and sell them, hoping to buy them back at a lower price, in a practice called short selling.

Short sellers such as Hindenburg like to build positions quietly before unveiling their thesis about the company to maximize profits. Discretion is necessary for them, as word of their presence in the stock sometimes can be enough to cause the shares to fall.

In India, however, securities rules make it hard to quietly build positions. Institutional investors are required to disclose their short positions upfront and there are other restrictions and registration requirements on foreign investors.

With the Adani Group, there are added complications: the shareholding is concentrated in the hands of the Adani family and its shares do not trade on exchanges abroad.

Nathan Anderson, Hindenburg’s founder, has been coy even with peers about his bet against Adani. Left and Carson Block, the founder of Muddy Waters Research and another prominent short seller, told Reuters that they got a single word response – ‘thanks’ – to messages of congratulations they sent to Anderson, when usually they would talk shop.

Cracking the code of how Hindenburg did the trade could lead to more short sellers taking positions against Indian companies, which have been rare, analysts said.

“Once these things (short-seller attacks) begin there are others who could be looking,” said Amit Tandon, managing director of proxy and governance firm Institutional Investor Advisory Services (IiAS) in India.

DERIVATIVE TRADES

Reuters could not learn details of Hindenburg’s trades. But several bankers familiar with trading in Indian securities said the more profitable piece of the short seller’s bet would likely lie in the derivative trades it had placed.

Some of Adani’s U.S. dollar corporate bonds , , fell 15-20 cents in the days after the report was released, which would make that bet profitable.

But there are limits. Only a few billion dollars of bonds in total were outstanding and they were not easily available to borrow, one debt banker said.

A more profitable way, these bankers said, would be to place the bet via participatory notes, or P-notes, which are lightly regulated offshore derivatives based off shares of Indian companies.

The entities that create the P-notes are registered with the Indian stock market regulator, but anyone can invest in them without having to directly register with SEBI. An investor can further use intermediaries to obscure its position.

Moreover, the market for P-notes is large. Billions of dollars’ worth of P-notes are traded every year, regulatory data shows, making it possible to place large bets, the bankers said.

(This story has been refiled to add dropped word ‘to’ in the lead paragraph)

Reporting by Shankar Ramakrishnan, Svea Herbst-Bayliss and Carolina Mandl; additional reporting by Jayshree Pyasi in Mumbai and Anshuman Daga in Singapore; Editing by Paritosh Bansal and Anna Driver

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Business

Adani abandons $2.5 billion share sale in big blow to Indian tycoon

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NEW DELHI, Feb 1 (Reuters) – Gautam Adani’s flagship firm called off its $2.5 billion share sale in a dramatic reversal on Wednesday as a rout sparked by a U.S. short-seller’s criticisms wiped billions more off the value of the Indian tycoon’s stocks.

The withdrawal of the Adani Enterprises (ADEL.NS) share offering marks a stunning setback for Adani, the school dropout-turned-billionaire whose fortunes rose rapidly in recent years in line with stock values of his businesses.

“Today the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the Company’s board felt that going ahead with the issue will not be morally correct,” Adani said.

“Our balance sheet is very healthy with strong cashflows and secure assets, and we have an impeccable track record of servicing our debt. This decision will not have any impact on our existing operations and future plans,” the billionaire added in a statement to Indian exchanges.

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Adani, whose global business interests span ports, airports, mining, cement and power, is battling to stabilise his companies and defend his reputation.

“Once the market stabilizes, we will review our capital market strategy,” he added.

A report by Hindenburg Research last week alleged improper use by the of offshore tax havens and stock manipulation by the Adani Group. It also raised concerns about high debt and the valuations of seven listed Adani companies.

The Jan. 24 report has since triggered a $86 billion erosion in market capitalisation of seven listed Adani Group companies.

Adani Group has denied the allegations, saying the short-seller’s allegation of stock manipulation has “no basis” and stems from an ignorance of Indian law. The group has always made the necessary regulatory disclosures, it added.

REFUNDS

Adani Group was working with its bankers to refund the proceeds received by in the secondary share sale of Adani Enterprises. Anchor investors who had supported the issue included Maybank Securities and Abu Dhabi Investment Authority.

The company aims to protect the interests of its investing community by returning the proceeds, it said.

Adani Group had on Tuesday mustered enough support from investors for the share sale to proceed, in what some saw as a stamp of investor confidence amid the storm.

But after a brief respite, the selloff in Adani Group stocks and bonds resumed on Wednesday, with shares in Adani Enterprises plunging 28% and Adani Ports and Special Economic Zone (APSE.NS) dropping 19%, the worst day on record for both.

The fundraising was critical for Adani, not just because it would have helped cut his group’s debt, but also because it was being seen by some as a gauge of confidence as he faced the biggest business and reputational challenge of his career.

Wednesday’s stock losses saw Adani slip to 15th on the Forbes rich list with an estimated net worth of $75.1 billion, below rival Mukesh Ambani, the chairman of Reliance Industries (RELI.NS) who ranks ninth with a net worth of $83.7 billion.

The share sale had succeeded on Tuesday even when the Adani Enterprises stock price in Mumbai markets traded below the offer price of the share sale.

“I do not know how the markets will behave in short term. But this is a measure to enhance (Adani’s) reputation since the investors were staring at a 30% loss even before the shares were alloted,” said Rajesh Baheti, chief executive, Crossseas Capital Services, an algo trading firm.

Reporting by Aditya Kalra and Jahnavi Nidumolu in Bengaluru; Editing by Anil D’Silva, Kirsten Donovan and Alexander Smith

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Business

Adani loses Asia’s richest crown as stock rout deepens to $84 billion

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BENGALURU, Feb 1 (Reuters) – Shares in Indian tycoon Gautam Adani’s conglomerate plunged again on Wednesday as a rout in his companies deepened to $84 billion in the wake of a U.S. short-seller report, with the billionaire also losing his title as Asia’s richest person.

Wednesday’s stock losses saw Adani slip to 15th on Forbes rich list with an estimated net worth of $76.8 billion, below rival Mukesh Ambani, the chairman of Reliance Industries Ltd (RELI.NS) who ranks ninth with a net worth of $83.6 billion.

Before the critical report by U.S. short-seller Hindenburg, Adani had ranked third.

The losses mark a dramatic setback for Adani, the school-dropout-turned-billionaire whose business interests stretch from ports and airports to mining and cement. Now, the tycoon is fighting to stabilise his businesses and defend his reputation.

It comes just a day after the group managed to muster support from investors for a $2.5 billion share sale for flagship firm Adani Enterprises on Tuesday, in what some saw as a stamp of investor confidence.

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The report by Hindenburg Research last week alleged improper use by the Adani Group of offshore tax havens and stock manipulation. It also raised concerns about high debt and the valuations of seven listed Adani companies.

The group has denied the allegations, saying the short-seller’s narrative of stock manipulation has “no basis” and stems from an ignorance of Indian law. It has always made the necessary regulatory disclosures, it added.

Shares in Adani Enterprises (ADEL.NS), often described as the incubator of Adani businesses, plunged 30% on Wednesday. Adani Power (ADAN.NS) fell 5%, while Adani Total Gas (ADAG.NS) slumped 10%, down by its daily price limit.

Adani Transmission (ADAI.NS) was down 6% and Adani Ports and Special Economic Zone (APSE.NS) dropped 20%.

Adani Total Gas, a joint venture with France’s Total (TTEF.PA), has been the biggest casualty of the short seller report, losing about $27 billion.

“There was a slight bounce yesterday after the share sale went through, after seeming improbable at a point, but now the weak market sentiment has become visible again after the bombshell Hindenburg report,” said Ambareesh Baliga, a Mumbai-based independent market analyst.

“With the stocks down despite Adani’s rebuttal, it clearly shows some damage on investor sentiment. It will take a while to stabilise,” Baliga added.

Reuters Graphics

SCRUTINY

Underscoring the nervousness in some quarters, Bloomberg reported on Wednesday that Credit Suisse (CSGN.S) had stopped accepting bonds of Adani group companies as collateral for margin loans to its private banking clients.

Deven Choksey, managing director of KRChoksey Shares and Securities, said this was a big factor in Wednesday’s share slides.

Credit Suisse had no immediate comment.

Scrutiny of the conglomerate is stepping up, with an Australian regulator saying on Wednesday it would review Hindenburg’s allegations to see if further enquiries were warranted.

Data also showed that foreign investors sold a net $1.5 billion worth of Indian equities after the Hindenburg report – the biggest outflow over four consecutive days since Sept. 30.

Headaches for the Adani Group are expected to continue for some time.

India’s markets regulator, which has been looking into deals by the conglomerate, has said it will add Hindenburg’s report to its own preliminary investigation.

State-run Life Insurance Corporation (LIC) (LIFI.NS)said on Monday it would seek clarifications from Adani’s management on the short seller report. The insurance giant was, however, a key investor in the Adani Enterprises share sale.

Hindenburg said in its report it had shorted U.S.-bonds and non-India traded derivatives of the Adani Group.

Reporting by Chris Thomas in Bengaluru and Aditi Shah in New Delhi; Additional reporting by Bharath Rajeshwaran and Aditya Kalra; Editing by Edwina Gibbs and Mark Potter

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World

France hit by new wave of strikes against Macron’s pension reform

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  • Reform would raise retirement age to 64
  • Schools, transport networks, refinery deliveries hit
  • Macron: Reform vital to ensure viability of pension system

SAINT-NAZAIRE, France, Jan 31 (Reuters) – Striking workers disrupted French refinery deliveries, public transport and schools on Tuesday in a second day of nationwide protests over President Emmanuel Macron’s plan to make people work longer before retirement.

Crowds marched through cities across France to denounce a reform that raises the retirement age by two years to 64 and which is a test of Macron’s ability to push through change now that he has lost his working majority in parliament.

On the rail networks, only one in every three high-speed TGV trains were operating and even fewer local and regional trains. Services on the Paris metro were thrown into disarray.

Buoyed by their success earlier in the month when more than a million people took to the streets, trade unions which have been battling to maintain their power and influence urged the public to turnout en masse.

“We won’t drive until we’re 64!” bus driver Isabelle Texier said at a protest in Saint-Nazaire on the Atlantic coast, adding that many careers involved tough working conditions.

Others felt resigned ahead of likely bargaining between Macron’s ruling alliance and conservative opponents who are more open to pension reform than the left.

“There’s no point in going on strike. This bill will be adopted in any case,” said 34-year-old Matthieu Jacquot, who works in the luxury sector.

Unions said half of primary school teachers had walked off the job. TotalEnergies (TTEF.PA) said 55% of its workers on morning shifts at its refineries had downed tools, a lower number than on Jan. 19. The hard-left CGT union said the figure was inaccurate.

For unions, the challenge will be maintaining a strike movement at a time when high inflation is eroding salaries.

At a local level, some announced “Robin Hood” operations unauthorised by the government. In the southwestern Lot-et-Garonne area, the local CGT trade union branch cut power to several speed cameras and disabled smart power meters.

“When there is such a massive opposition, it would be dangerous for the government not to listen,” said Mylene Jacquot, secretary general of the CFDT union’s civil servants branch.

[1/16] Protesters attend a demonstration against French government’s pension reform plan in Paris as part of a day of national strike and protests in France, January 31, 2023. REUTERS/Gonzalo Fuentes

Opinion polls show a substantial majority of the French oppose the reform, but Macron intends to stand his ground. The reform was “vital” to ensure the viability of the pension system, he said on Monday.

A street march in Paris takes place later in the day.

‘BRUTAL’

The pension system reform would yield an additional 17.7 billion euros ($19.18 billion) in annual pension contributions, according to Labour Ministry estimates.

Unions say there are other ways to raise revenue, such as taxing the super rich or asking employers or well-off pensioners to contribute more.

“This reform is unfair and brutal,” said Luc Farre, the secretary general of the civil servants’ UNSA union. “Moving (the pension age) to 64 is going backwards, socially.”

French power supply was down by 4.5% or 3 gigawatts (GW), as workers at nuclear reactors and thermal plants joined the strike, data from utility group EDF (EDF.PA) showed.

TotalEnergies said deliveries of petroleum products from its French sites had been halted because of the strike, but that customers’ needs were met.

The government made some concessions while drafting the legislation. Macron had originally wanted the retirement age to be set at 65, while the government is also promising a minimum pension of 1,200 euros a month.

Prime Minister Elisabeth Borne has said the 64 threshold is “non-negotiable”, but the government is exploring ways to offset some of the impact, particularly on women.

Hard-left opposition figure Jean-Luc Melenchon, a vocal critic of the reform, said parliament would on Monday debate a motion calling for a referendum on the matter.

“The French are not stupid,” he said at a march in Marseille. “If this reform is vital, it should be possible to convince the people.”

Reporting by Forrest Crellin, Benjamin Mallet, Sudip Kar-Gupta, Leigh Thomas, Blandine Henault, Michel Rose, Dominique Vidalon, Benoit Van Overstraeten; Writing by Ingrid Melander and Richard Lough; Editing by Janet Lawrence

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Business

Adani’s $2.5 bln share offer backed by investors, despite short-seller attack

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MUMBAI, Jan 31 (Reuters) – Indian billionaire Gautam Adani’s $2.5 billion share sale inched closer to full subscription on Tuesday as investors pumped in funds after a tumultuous week for his group in which its stocks were pummeled by a scathing short-seller report.

The secondary share sale of flagship Adani Enterprises (ADEL.NS) was subscribed 93% on Tuesday, including the anchor investor portion, Indian stock exchange data showed. The share sale needed at least 90% subscription to go through.

By Monday, the book building process of the country’s largest share sale had received only 3% in bids, amid swirling concerns that the share sale could struggle due to a market rout in Adani’s stocks in recent days.

The share sale is critical for Adani, not just because it is India’s largest follow-on offering and will help cut debt, but also because its success will be seen as a stamp of confidence by investors at a time the tycoon faces one of his biggest business and reputational challenges of recent times.

The offer closes days after Adani’s public faceoff with Hindenburg Research, which on Jan. 24 flagged concerns about the use of tax havens and “substantial debt” at the group. It added that shares in seven Adani listed companies have an 85% downside due to what it called “sky-high valuations”.

That has since sparked $65 billion in cumulative losses for stocks of the Adani group, which called the report baseless.

The support for Adani’s share sale came even as the flagship’s shares were trading at 2,967 rupees, up nearly 2.5% but below the lower end of the share sale price band of 3,112 rupees.

“It looks down to the wire with just a few hours remaining on the last day, but the offering should go through. Institutions seem to be subscribing to capitalise on opportunity to buy in bulk quantities outside the open market,” said Dipan Mehta, founder director of Elixir Equities.

Adani Group’s total gross debt in the financial year ended March 31, 2022, rose 40% to 2.2 trillion rupees ($26.83 billion). Adani said on Sunday – while responding to Hindenburg’s allegations – that over the past decade the group has “consistently de-levered”. Hindenburg later said Adani’s “response largely confirmed our findings and ignored our key questions.”

Reuters Graphics

The group had in recent days repeatedly said investors were standing by its side and the share offering would go through, amid rising concerns that may not happen. Bankers at one point had considered tweaking the pricing of the issue, or extending the sale, Reuters had reported.

Adani even said the Hindenburg report was a “calculated attack” on the country and its institutions while its CFO compared the market rout of its stocks to a colonial-era massacre.

Demand from retail investors remained muted, garnering bids only worth around 10% of the shares on offer for that segment. On Tuesday, demand mostly came from foreign institutional investors, as well as corporates who bid in excess of 1 million rupees each, data showed.

Over the weekend and through Monday, Adani’s firm held extensive discussions with investment bankers and institutional investors to attract subscriptions, according to two sources with direct knowledge of the talks.

Abu Dhabi conglomerate International Holding Company (IHC.AD) said it will invest $400 million in the issue.

“The follow-on public offering has to go through to restore investor confidence,” said V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The Hindenburg report and its fallout have drawn global attention. Adani is now the world’s eighth richest person, down from third ranking on Forbes’ rich list last week.

Adani Transmission (ADAI.NS) rose 1.6% on Tuesday, after losing 38% since the Hindenburg report, while Adani Ports and Special Economic Zone (APSE.NS) climbed 3.2%.

Adani Total Gas (ADAG.NS) languished at its 10% lower price limit, while Adani Power (ADAN.NS) and Adani Wilmar (ADAW.NS) were down 5% each.

Reuters Graphics

Global index publisher FTSE Russell said on Tuesday it continues to monitor publicly available information on the group, in particular from the Indian regulatory authorities.

Hindenburg said in its report it had shorted U.S.-bonds and non-India traded derivatives of the Adani Group. On Tuesday, U.S. dollar-denominated bonds issued by Adani Ports and Special Economic Zone continued their fall into a second week.

($1 = 82.0025 Indian rupees)

Reporting by M. Sriram and Chris Thomas; Editing by Aditya Kalra and Muralikumar Anantharaman

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World

New Zealand counts cost of Auckland floods, more rain forecast

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WELLINGTON, Jan 30 (Reuters) – Flood-ravaged Auckland is forecast to receive further heavy rain in the coming days, authorities in New Zealand’s largest city said on Monday, as insurers counted the costs of what looks likely to be the country’s most expensive weather event ever.

Four people lost their lives in flash floods and landslides that hit Auckland over the last three days amid record downpours. A state of emergency remains in place in Auckland. A state of emergency in the Waitomo region south of Auckland was lifted.

Flights in and out of Auckland Airport are still experiencing delays and cancellations, beaches around the city of 1.6 million are closed and all Auckland schools will remain closed until Feb. 7.

“There has been very significant damage across Auckland,” New Zealand Prime Minister Chris Hipkins told state-owned television station TVNZ on Monday. “Obviously there were a number of homes damaged by flooding but also extensive earth movements.”

Currently, around 350 people were in need of emergency accommodation, he added.

LOOMING CLOUDS

Metservice is forecasting further heavy rains to hit the already sodden city late on Tuesday.

“We have more adverse weather coming and we need to prepare for that,” Auckland Emergency Management duty controller Rachel Kelleher told a media conference.

Fire and Emergency services received 30 callouts overnight Monday, including responding to a landslide when a carport slid down a hill.

The council has designated 69 houses as uninhabitable and has prevented people from entering them. A further 300 properties were deemed at risk, with access restricted to certain areas for short periods.

The north of New Zealand’s North Island is receiving more rain than normal due to the La Nina weather event.

The National Institute of Water and Atmospheric Research (NIWA) said Auckland has already recorded more than eight times its average January rainfall and 40% of its annual average rainfall.

INSURERS FACE HEFTY BILL

The cost of the clean up is expected to top the NZ$97 million ($63 million) bill for flooding on the West Coast in 2021 but will not be anywhere near as expensive as the estimated NZ$31 billion insured costs of two major earthquakes in Christchurch in 2010-2011, said Insurance Council of New Zealand spokesperson Christian Judge.

Insurance Australia Group’s (IAG.AX) New Zealand divisions have received over 5,000 claims so far and Suncorp Group (SUN.AX) said it received around 3,000 claims across the Vero and AA Insurance Brands. New Zealand’s Tower (TWR.NZ) said it had received around 1,900 claims.

“The number of claims is expected to rise further over the coming days, with the event still unfolding and as customers identify damage to their property,” IAG said in a statement.

Economists say the recovery and rebuild could add to inflationary pressures in New Zealand as vehicles and household goods need to be replaced and there is an increase in construction work needed to repair or rebuild houses and infrastructure damaged by the flooding.

($1 = 1.5385 New Zealand dollars)

Reporting by Lucy Craymer; Editing by Aurora Ellis and Lincoln Feast

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Business

Adani’s $2.5 billion share sale faces crucial day after rout

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NEW DELHI, Jan 29 (Reuters) – Gautam Adani faces a critical day on Monday with his flagship company’s $2.5 billion share sale’s second day of bidding overshadowed by a $48 billion rout in the Indian billionaire’s stocks which was sparked by a U.S. short seller’s report.

Seven listed companies belonging to the Adani conglomerate, which is led by Asia’s richest man, saw sharp falls in their values after Hindenburg Research report last week flagged concerns about high debt levels and the use of tax havens.

Adani Group issued a detailed response late on Sunday, saying it complies with all local laws and had made necessary regulatory disclosures. It has called the report baseless and said it was considering taking action against Hindenburg.

For 60-year-old Adani, the stock market meltdown has been a dramatic setback for a school-dropout who rose swiftly in recent years to become the world’s third richest man, before slipping to rank seventh on the Forbes list last week.

The secondary share sale by Adani Enterprises (ADEL.NS) opened for retail and institutional investors on Friday, but saw only 1% subscriptions as the company’s stock fell 11% below the minimum offer price.

Adani Group told Reuters in a statement on Saturday that the sale remains on schedule at the planned issue price, even as sources said bankers on the country’s largest secondary share sale were considering extending the timeline beyond Jan. 31, or tweaking the price due to the fall in its share price.

“It is important for the Adani Group to ensure the share sale goes through — If they stick to the price and don’t reduce it, and the stock doesn’t bounce back, nobody will be keen to apply,” said Mumbai-based market analyst, Ambareesh Baliga, who advises various family offices.

“Monday’s trade will be critical.”

In a separate statement on Sunday, Adani Group’s chief financial officer Jugeshinder Singh said it is focused on the share sale and is confident it will sail through. He also said its anchor investors have shown faith and remain invested.

‘FREE FALL’

Some Adani Group stocks have surged more than 1,500% in the last three years amid aggressive expansion in businesses that include ports, power generation, airports and mining.

Adani Enterprises has set a floor price of 3,112 rupees per share and a cap of 3,276 rupees for the secondary share sale – well above their close of 2,761.45 rupees on Friday.

Arun Kejriwal, founder of Kejriwal Research & Investment, said investors were likely to wait until the last day of the share sale to see if the price band is tweaked.

“I expect that the free fall seen of Friday may abate but recovery back towards a level prior to this fall may be difficult,” he added.

Indian regulations say the share offering must receive minimum subscription of 90%, and if it does not the issuer must refund the entire amount.

Maybank Securities and Abu Dhabi Investment Authority are among investors who bid for the anchor portion of the issue.

On Saturday, index provider MSCI said it was seeking feedback from market participants on Adani and was monitoring the factors that “may impact the eligibility of those relevant securities” in MSCI indexes.

There are at least six Adani Group companies in the MSCI India Index, with a cumulative weight of 4.31%.

Reporting by Aditya Kalra, Ira Dugal, Jayshree P Upadhyay and Chris Thomas; Editing by Alexander Smith

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Business

Hindenburg shorts India’s Adani Group, flags debt and accounting concerns

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BENGALURU, Jan 25 (Reuters) – Hindenburg Research said on Wednesday it held short positions in India’s Adani Group, accusing the conglomerate of improper extensive use of entities set up in offshore tax havens and expressing concern about high debt levels.

The report, which comes days ahead of a $2.5 billion share offering by flagship firm Adani Enterprises (ADEL.NS), sent shares in Adani group firms sliding.

Hindenburg, a well known U.S. short-seller, said key listed companies in the group controlled by billionaire Gautam Adani had “substantial debt” which has put the entire group on a “precarious financial footing”.

It also said that seven Adani listed companies have an 85% downside on a fundamental basis due to what it called “sky-high valuations”.

An Adani spokesperson did not immediately respond to Reuters request for comment on the report, which Hindenburg said was based on research that involved speaking with dozens of individuals, including former Adani Group executives as well as a review of documents.

Hindenburg said it held its short positions through U.S.-traded bonds and non-Indian-traded derivative instruments.

Adani has repeatedly dismissed debt concerns. Adani Chief Financial Officer Jugeshinder Singh told media on Jan. 21 “Nobody has raised debt concerns to us. No single investor has.”

In the wake of the Hindenburg report, Adani Ports And Special Economic Zone (APSE.NS) slid 7.3% to its lowest level since early July, while Adani Enterprises dropped 3.7% to a near three-month low.

Reuters Graphics Reuters Graphics

Adani-owned cement firms ACC (ACC.NS) and Ambuja Cements (ABUJ.NS) fell 6.7% and 9.7% respectively.

Hindenburg’s report said that five of seven key listed Adani companies have reported current ratios – a measure of liquid assets minus near-term liabilities – below 1. This, the short-seller said, suggested “a heightened short-term liquidity risk.”

Adani Group’s total gross debt in the financial year ending March 31, 2022, rose 40% to 2.2 trillion rupees.

Refinitiv data shows that debt at all the Adani Group’s seven key listed Adani companies exceeds equity, with debt at Adani Green Energy Ltd (ADNA.NS) exceeding equity by more than 2,000%.

CreditSights, part of the Fitch Group, described the group last September as “overleveraged” and said it had concerns over its debt. While the report later corrected some calculation errors, CreditSights said it maintained its concerns over leverage.

Hindenburg is known for shorting electric truck maker Nikola Corp (NKLA.O) and Twitter though it later reversed its position in Twitter.

Shares in Adani Enterprises surged 125% in 2022, while other group companies, including power and gas units, rose more than 100%.

Reporting by Mrinmay Dey, Chris Thomas and Aditya Kalra; Additional reporting by Miyoung Kim; Editing by Dhanya Ann Thoppil and Edwina Gibbs

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US

U.S. airports rumble back to life after FAA computer outage

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WASHINGTON, Jan 11 (Reuters) – U.S. flights were slowly beginning to resume departures and a ground stop was lifted after the Federal Aviation Administration (FAA) scrambled to fix a system outage overnight that had forced a halt to all U.S. departing flights.

The cause of the problem, which delayed thousands of flights in the United States, was unclear, but U.S. officials said they had so far found no evidence of a cyberattack.

“Normal air traffic operations are resuming gradually across the U.S. following an overnight outage to the Notice to Air Missions system that provides safety info to flight crews. The ground stop has been lifted. We continue to look into the cause of the initial problem” the FAA said in a Tweet.

More than 4,300 flights had been delayed and 700 canceled as officials said it will take hours to recover from the halt to flights.

The FAA had earlier ordered airlines to pause all domestic departures after its pilot alerting system crashed and the agency had to perform a hard reset around 2 a.m., officials said.

The FAA said shortly before 8:30 a.m. departures were resuming at Newark and Atlanta airports.

The FAA is expected to implement a ground delay program in order to address the backlog of flights halted for hours. Flights already in the air had been allowed to continue to their destinations during the ground stop.

U.S. President Joe Biden ordered the Transportation Department to investigate the outage and said the cause of the failure was unknown at this time. Asked if a cyber attack was behind the outage, Biden told reporters at the White House, “We don’t know.”

Transportation Secretary Pete Buttigieg pledged “an after-action process to determine root causes and recommend next steps.”

The FAA said it was working to restore the Notice to Air Missions system that alerts pilots to hazards and changes to airport facilities and procedures that had stopped processing updated information.

A total of 4,314 U.S. flights were delayed as of 9:04 a.m. ET, flight tracking website FlightAware showed. Another 737 were canceled.

MODERNIZATION NEEDED

United said it has resumed operations. The Chicago-based carrier, however, warned that customers might continue to see some delays and cancellations.

Shares of U.S. carriers fell in Wednesday’s premarket trading. Southwest Airlines (LUV.N) was down 2.4%, while Delta Air Lines Inc (DAL.N), United Airlines (UAL.O) and American Airlines (AAL.O) were down about 1%.

“America’s transportation network desperately needs significant upgrades … We call on federal policymakers to modernize our vital air travel infrastructure.” said Geoff Freeman, President and CEO of the U.S. Travel Association, a group representing U.S. airlines, hotels, car rental companies, and theme parks.

FAA’s system outage comes weeks after an operational meltdown at Southwest at the end of last year left thousands of passengers stranded.

A severe winter storm right before Christmas coupled with the Texas-based carrier’s dated technology led to over 16,000 flight cancellations last month.

The DOT, FAA’s parent agency, heavily criticized Southwest’s failures and pressured the airline to compensate passengers for missed flights and other related costs. There is no legal requirement that the FAA must compensate passengers for flight delays caused by agency computer issues.

ESSENTIAL INFORMATION

A NOTAM is a notice containing information essential to personnel concerned with flight operations, but not known far enough in advance to be publicized by other means.

Information can go up to 200 pages for long-haul international flights and may include items such as runway closures, bird hazard warnings and construction obstacles.

United Airlines (UAL.O) said it had temporarily delayed all domestic flights and would issue an update when it learned more from the FAA.

Germany’s Lufthansa and Air France both said they were continuing to operate flights to and from the United States, while the French airline said it was monitoring the situation.

The operator of Paris international airports – Paris Charles de Gaulle airport and Orly airport – said it expects delays to flights.

Austin-Bergstrom International Airport said on Twitter that ground stops across the country were causing delays. A ground stop is an air traffic control measure that slows or halts aircraft at a given airport.

In an earlier advisory on its website, the FAA said its NOTAM system had “failed”, although NOTAMs issued before the outage were still viewable. Earlier this month, a problem with a different airline computer control system delayed dozens of flights in Florida.

A total of 21,464 flights are scheduled to depart airports in the United States on Wednesday with a carrying capacity of nearly 2.9 million passengers, data from Cirium shows.

American Airlines has the most departures from U.S. airports with 4,819 flights scheduled, followed by Delta and Southwest, Cirium data showed.

Reporting by Doina Chiacu and David Shepardson in Washington, Abhijith Ganapavaram in Bengaluru, Jamie Freed in Sydney and Rajesh Kumar Singh in Chicago; Additional reporting by Nathan Gomes and Steve Holland in Washington
Writing by Shailesh Kuber and Alexander Smith Editing by Edmund Blair and Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.

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World

One dead, 57 injured in accident on Mexico City metro

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MEXICO CITY, Jan 7 (Reuters) – At least one person was killed and 57 were injured in a train collision on Mexico City’s metro early on Saturday, local authorities said.

The person killed in the morning accident was a young woman, city security head Omar Garcia told local media Grupo Milenio.

Garcia shared an updated list of the injured later on Saturday, and the city’s mayor, Claudia Sheinbaum, said on Twitter that she was at the site.

Four others who were trapped on one wagon on Line 3 were rescued and are in good health, Garcia said earlier.

A variety of accidents have taken place on the metro in recent years. The most serious was the May 2021 collapse of a rail overpass on Line 12 that killed 26 people and injured more than 60.

Maintenance shortcomings were identified as one of that accident’s causes.

Reporting by Lizbeth Diaz in Mexico City;
Writing by Julia Symmes Cobb;
Editing by Leslie Adler

Our Standards: The Thomson Reuters Trust Principles.

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