Abu Dhabi group IHC sells out of two Adani companies

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Abu Dhabi conglomerate International Holding Company is to sell its stake in two of Indian tycoon Gautam Adani’s companies, in a blow to the business empire battling allegations of accounting fraud.

IHC announced in April 2022 that it was investing about $500mn each in renewables arm Adani Green Energy and power company Adani Transmission, and a further $1bn in the group’s flagship Adani Enterprises.

At the time, IHC’s chief executive Syed Basar Shueb described the decision to back Adani as a “long-term investment in India”, while Adani Green’s executive director Sagar Adani hailed it as “a start of a wider relationship between [t]he Adani Group and IHC”.

But the conglomerate, which is chaired by Sheikh Tahnoon bin Zayed al-Nahyan, one of the United Arab Emirates’ most powerful men, said on Thursday that it had found a buyer for its Adani Green and Transmission stakes.

The decision to exit the companies cuts IHC’s exposure to Adani’s companies by 50 per cent just 18 months after making the investments.

IHC said the Adani disposals were part of its “overall portfolio rebalancing strategy”, and that it was completing regulatory paperwork to complete the transaction with the unnamed buyer. The filing made no reference to its stake in Adani Enterprises.

The sale comes eight months after US short seller Hindenburg Research accused the ports to power Adani Group of accounting fraud and stock market manipulation. Adani has strongly denied the allegations.

The report triggered a sell-off that at one point knocked $150bn off the combined stock market value of Adani’s 10 listed companies — shares in the groups have since recovered some of their losses.

IHC did not disclose the price at which it was selling out of its stakes, but shares in both Adani Transmission and Adani Green are trading far below the price at which the conglomerate bought into the companies, suggesting significant losses on both investments.

According to the most recent filings with the Indian stock exchange, IHC owned 1.3 per cent of Adani Green and 1.4 per cent of Adani Transmission, which this year was renamed Adani Energy Solutions. French oil major TotalEnergies has a 20 per cent stake in Adani Green.

IHC did not immediately respond to a request for comment. Adani declined to comment.