Adani Group, a global conglomerate with diverse interests spanning across sectors, faced some serious allegations this year by different global agencies. However, the group has marked yet another successful year in 2023, cementing its position as a powerhouse in the business world. Amid the ongoing global economic uncertainties, evolving regulatory landscapes in various markets, and US-based short-seller Hindenburg Research's report, the conglomerate staged a recovery in the stock value paving their resurrection in the market caps. 


Hindenburg Allegations


In January, the Hindenburg Research report on Adani Group made allegations regarding the group's business practices. The report accused the conglomerate of various financial irregularities, including improperly diverting funds from its listed entities to bolster the financial health of other firms. It specifically targeted the group's dealings with its subsidiaries and raised concerns about opaque accounting practices and alleged conflicts of interest among the companies within the group.


Adani Group strongly refuted these allegations, calling them "blatantly erroneous" and "mischievous." They defended their financial transparency and integrity, stating that the claims made in the Hindenburg report were misleading and aimed at manipulating the market.


OCCRP Report


In August, Organised Crime and Corruption Reporting Project's (OCCRP's) report has erupted a new political and economic storm in India. The report has alleged Gautam Adani's family of investing millions of dollars in its own companies via "opaque" Mauritius funds. However, Adani Group while dismissing the charges called the new claims a mere ‘rehash of allegations made by Hindenburg’ in January this year. The group also called the report to be another "concerted bid by Soros-funded interests supported by a section of the foreign media to revive the meritless Hindenburg report."


Stock Show


Shares of all publicly traded Adani Group companies took a massive hit after Hindenburg Research made accusations of stock manipulation and accounting fraud. Though Gautam Adani denied the allegations, calling it a 'calculated attack', at one point, the attack cleared out more than $150 billion in market value from the group's publicly listed companies.


To restore the trust of investors, investors such as GQG and the Abu Dhabi conglomerate International Holding were sold shares of some companies. The group also paid back loans that were backed by stock. For example, only 2.4 per cent of the shares in Adani Ports continue to be pledged as of the September quarter, down from 17.3 per cent at the end of 2022.


The reports of Hindenburg Research and OCCRP posed a challenge to the group's growth, leverage, and valuations. But its backers including TotalEnergies, Wilmar International, and global banks, including Standard Chartered and Singapore's DBS stood their ground. The US government's investment in APSEZ's Colombo port project also came as a helpful endorsement. As a result, Florida-based GQG Partners, which made big bets on group companies this year, has seen the value of its investments surge.


Robust Performance


The group's market capitalisation (Mcap) is now Rs 14.4 lakh crore and is on course to touch Rs 15 lakh crore (nearly $180 billion). On December 1, the Mcap stood at Rs 11.22 lakh crore. In the trading week that ended on December 8, the market capitalisation gained Rs 3.15 lakh crore ($37.7 billion), the highest weekly rise this year.


The highest weekly gain of Rs 83,000 crore was recorded by Adani Green Energy, which recently raised $1.36 billion in construction facilities from a consortium of international banks. The group’s flagship firm, Adani Enterprises, gained over Rs 52,000 crore in the same period. Adani Total Gas' market cap was up Rs 50,000 crore and Adani Ports and Special Economic Zone over Rs 42,000 crore.


In the first half of fiscal year 2024, the Adani portfolio showed strong financial performance, further enhancing its strong credit profile. During the period, the portfolio level EBITDA stood at Rs 43,688 crore ($5.3 billion), up 47 per cent YoY. This outpaced the portfolio’s historical five-year Compound Annual Growth Rate (CAGR) trajectory of 26.3 per cent. It is noteworthy that H1 FY24 EBITDA surpassed the full-year EBITDA of FY22. Additionally, Trailing Twelve Month EBITDA is notably close to three times FY19 EBITDA.


Wealth Creator


In the last week of November, the Supreme Court, which was hearing four petitions in the Adani-Hindenburg case, reserved its order, saying it could not be assumed that the Hindenburg report was factually correct. This triggered a rally in the group stocks. Following this came a statement by Group Chief Financial Officer Jugeshinder Singh that the group plans to invest around Rs 7 lakh crore over 10 years with most funds being generated from within. This spurt at the stock market led to Adani Enterprises Ltd being named as the best all-round wealth creator for the second time in a row in Motilal Oswal’s top 10-wealth creators for 2018-2023.


Motilal Oswal Financial Services in its latest study shared the names of companies which created the biggest wealth, the fastest wealth and consistent wealth for investors. In the biggest wealth creator category, Adani Enterprises added about Rs 1.75 crore in the given period, putting it at the ninth spot; it ranked second in the fastest category with 5-year price CAGR of 78 per cent.


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