Big setback for Adani: Swiss Investment Bank Credit Suisse Stops Accepting Bonds Of Adanis Group

Credit Suisse, a Swiss investment bank, has ceased accepting Adani group bonds as security for margin loans to its private clients. This signals increasing scrutiny of billionaire Gautam Adani’s finances following fraud allegations by short-seller Hindenburg Research.

According to Bloomberg, Credit Suisse’s private banking division has assigned a lending value of zero to bonds issued by Adani Ports and Special Economic Zone, Adani Green Energy, and Adani Electricity Mumbai Ltd.

Other banks are still lending against Adani’s debt, with at least two European private banks keeping the lending level unchanged. One of these banks is offering to lend between 75% to 80% for Adani Ports dollar bonds.

If a private bank reduces its lending value to zero, clients usually need to provide additional cash or some other form of collateral. If they don’t, their securities may be sold to repay the loan.

The Adani group’s empire has been thrown into turmoil after Hindenburg Research claimed in a report that the conglomerate used a network of companies in tax havens to artificially inflate revenue and stock prices.

The bonds of the group hit record lows after the allegations, but they have recovered some losses since Adani Enterprises Ltd. successfully completed a $2.5 billion share sale with support from existing shareholders and institutional investors.

According to Forbes Real-time billionaire list for 2023, Mukesh Ambani, the chairman of Reliance Industries, overtook Gautam Adani on Wednesday to become the richest Indian in the world with a net worth of $84.3 billion.

Mukesh Ambani overtook Gautam Adani as the richest Indian in the world after a 0.19% increase in the Reliance Industries Chairman’s assets, boosting his wealth by $164 million. Meanwhile, Gautam Adani’s assets decreased by 4.62%, with his wealth estimated at $84.1 billion.

Adani, formerly one of the top three billionaires in the world, has fallen to the 10th spot, just below Mukesh Ambani. Bernard Arnault and family, of French luxury fashion giant LMVH, now occupy the top spot on the list.