BlackRock has more than $100 million exposure to Adani’s dollar debt, report says

• The world’s biggest asset manager BlackRock holds over $100 million in Adani dollar bonds, per Bloomberg.
• It’s one of the biggest holdings among the 200 or so institutions with exposure to the Indian conglomerate.
• Shares in Adani Group companies have lost over $100 billion in value since a US short seller’s fraud allegations.

BlackRock has more than $100 million tied up in Adani Group’s dollar bonds, which have come under intense scrutiny since a US short seller’s scathing research note on the Indian conglomerate sparked a rout in its stocks.

Filings to the SEC show the world’s biggest asset manager has one of the biggest known exposures to Adani’s estimated $8 billion in US currency notes, Bloomberg reported Friday.

Short-seller Hindenburg Research’s research note last Tuesday alleged there was a “brazen stock manipulation and accounting fraud scheme” at the Adani Group. The ensuring battle between Adani and Hindenburg has driven a rout in stocks of the group’s individually listed businesses, wiping over $100 billion off their market value.

Notably, concern over Adani’s debt was a key pillar of Hindenburg’s argument for initiating a short-sell battle with the group.

“Key listed Adani companies have also taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing. 5 of 7 key listed companies have reported ‘current ratios’ below 1, indicating near-term liquidity pressure,” it said in its research note.

Adani canceled a $2.5 billion share sale this week, despite picking up enough investors to pull it off.

Legendary investor Mark Mobius said his firm didn’t take part in Adani Enterprises’ stock sale before it was scrapped because it had concerns about the embattled Indian conglomerate’s debt.

“It’s all about debt. The company and its associates are heavily in debt, and that’s what sort of scared us away,” the founding partner of Mobius Capital Partners said in a Bloomberg interview Thursday. 

Over 200 institutions have taken on debt from the group’s companies, Bloomberg reported. Its analysis of filings covered only 18% of Adani’s total dollar debt due to different reporting rules across countries, it said.  

It reported that Adani is considering prepaying some loans early to restore confidence in the conglomerate’s financial health. BlackRock didn’t immediately respond to Insider’s request for comment.