Our Bat Was Doing The Talking, Gautam Adani Says On Anniversary Of Hindenburg Report
Last year this time, US-based Hindenburg Research released a report on Adani Group companies alleging that the firms were involved in stock manipulation, accounting fraud, and excessive debt
A year after a damaging report by US-based Hindenburg Research against Adani Group, its Chairman Gautam Adani on Thursday said the "trials and tribulations" of the past year have made the conglomerate stronger as it continued on its growth path. In an open letter dated January 25, 2024, Adani wrote, "It was on 25 Jan 2023, exactly a year ago, when news arrived at breakfast that a short-seller in New York had put up online a compilation of allegations against the Adani Group."
Last year this time, Hindenburg Research released a report titled ‘How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History’ on Adani Group companies alleging that the firms were involved in stock manipulation, accounting fraud, and excessive debt. The report caused volatility in the Indian stock market and Adani Group stocks suffered a freefall, losing over $100 billion worth of market value within days. Adani Group termed the report 'malicious' and 'baseless'; said the company would explore legal options against Hindenburg Research.
Adani Enterprises also called off its FPO worth Rs 20,000 crore, which was opened for subscription and attracted 1.12 times the subscriptions. However, no domestic financial institution or mutual fund bids for the three-day-long FPO.
The group chairman said that the “fatuously self-styled” research report contained the “same dead allegations that detractors had been trying to resurrect by flogging them through their allies in the media”. “Lies and baseless allegations against us were nothing new. So, after issuing a comprehensive response, I thought no more about it. However, a lie had crossed the world even as truth was lacing up its shoes! For me, having been raised on a staple diet of the power of truth, this attack was a lesson on the power of falsehoods," he wrote.
Adani narrated the whole situation that took place last year. He said, "In the fog of this war, our biggest weapon was adequate liquidity. To augment our strong cash reserves of Rs 30,000 crore, we further fortified our financial position by raising an additional Rs 40,000 crore, equal to the debt repayment for the next two years, through stake sales in our group companies to investors of immaculate global standing, like GQG Partners and the QIA. This served the objectives of readying an expansive war-chest of cash reserves, restoring confidence in the markets and creating world-class infrastructure assets for India. By pre-paying Rs 17,500 crore of margin-linked financing, we insulated and ring-fenced our portfolio from market volatility. I asked my leadership team to focus on businesses. This catalysed a record-breaking EBITDA growth of 47 per cent in the first half of FY24, with the Adani portfolio delivering its highest-ever quarterly profit in Q3FY24."
Gautam Adani said, “Our bat was doing the talking. We executed an extensive engagement programme for our financial and non-financial stakeholders. The finance team alone conducted close to 300 meetings across the world in the initial 150 days, ensuring the affirmation of ratings across 104 entities by nine rating agencies."
The Opposition parties called for a Joint Parliamentary Committee in Parliament to probe the allegations against Adani Group, while the Supreme Court Supreme Court mandated the setting up of a committee to probe the allegations. Former SC judge A M Sapre is appointed as the head of the committee. The court also asked the SEBI to look into the crash of the Adani Group stocks. This January, the SC in its judgement said that there is no ground to transfer the investigation from SEBI to SIT. The apex court has asked the SEBI to conclude the probe into two pending cases within three months.
Now most of the listed group firms have recouped losses induced by the Hindenburg report, Adani claimed. "We remained committed to maintaining our growth momentum. The Group continued its investments, evidenced by our asset base growth to Rs 4.5 lakh crore," he mentioned, while adding that over this challenging year, Adani group’s shareholder base expanded by 43 per cent, reaching nearly 70 lakh.
He also wrote that the trials and tribulations of the past year have taught the group valuable lessons. “While this devious attack on us – and our strong countermeasures – will no doubt become a case study, I felt compelled to share my learnings because, it was us today, it could be someone else tomorrow. I am under no illusions that this is the end of such attacks. I believe we have emerged even stronger from this experience and even more unwavering in our resolve to continue our humble contribution to the India growth story,” he noted.
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