• Friday, January 27, 2023


Adani Group hits back at Hindenburg’s ‘brazen manipulation’ report, calls it ‘malicious’; stocks slide

Indian business tycoon Gautam Adani (Photo by INDRANIL MUKHERJEE/AFP via Getty Images)

By: Shubham Ghosh

The Adani Group has reacted to the report published by US-based Hindenburg Research saying that it presented evidence that the Indian conglomerate “engaged in brazen stock manipulation and accounting fraud scheme over the course of decades.”

The investment research firm claimed that key listed companies in the group had “substantial debt” that has put the entire group on a “precarious financial footing”, according to a Reuters report. 

Jugeshinder Singh, the chief financial officer of Adani Group, said in a statement that the company was left shocked by the report and called it a “malicious combination of selective misinformation and stale, baseless and discredited allegations”.

“The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming follow-on Public Offering from Adani Enterprises,” the statement said, adding the group has always complied with all laws.

According to Hindenburg, the report was based on a probe that continued over a period of two years and included interaction with many individuals, including former executives of Adani Group and review of documents.

Securities and Exchange Board of India, the country’s capital markets regulator, did not immediately respond to a request over the matter, Reuters added.

The Adani Group has dismissed the debt concerns earlier as well.

On January 21, Singh told the media that nobody had raised debt concerns with them, not even a single investor.

Adani shares tumble

However, in the wake of the report, shares in Adani Ports and Special Economic Zone tumbled 7.3 per cent to their lowest level since early July. Adani Enterprises also fell 3.7 per cent to a near three-month low.

Adani-owned cement firms ACC and Ambuja Cements, which it acquired from Switzerland’s Holcim recently in a $10.5 billion (£8.5 billion) deal, fell 7.2 per cent and 9.7 per cent, respectively, on Wednesday (25).

Adani Group’s total gross debt in the financial year ending March 31, 2022, rose 40 per cent to 2.2 trillion rupees (£21.8 billion).

Refinitiv data have shown that debt at Adani Group’s seven key listed Adani companies exceeds equity, with debt at Adani Green Energy Ltd exceeding equity by more than 2,000 per cent.

CreditSights, part of the Fitch Group, called the group “overleveraged” last September and said it had concerns about its debt. While the report later amended some calculation errors, CreditSights said it still maintained its concerns about Adani’s leverage, Reuters added.

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