IT HAS BEEN A TRULY remarkable year for Gautam Adani. In January, the Adani Group chairman was accused by Hindenburg Research of “brazen stock manipulation and accounting fraud”. Hindenburg said the group had taken on substantial debt through unlawful means, “putting the entire group on precarious financial footing”.
The allegation triggered a frantic sell-off that shaved $100 billion off Adani Group shares. Adani began the firefight to win back investor confidence by issuing a 400-page rebuttal of charges, accusing Hindenburg of attacking India and its capital markets. A Supreme Court-appointed committee pitched in, saying it had found no regulatory lapse around the allegation of price manipulation.
In May, the group began putting the controversy behind, as shares of its flagship company Adani Ports inched back to pre-Hindenburg level. In August, the Enforcement Directorate found that 12 companies based in tax havens were “top beneficiaries” of short-selling Adani shares. Since naked short-selling (the practice of selling borrowed stock, and buying it back and returning it to the owner at a lower price) is illegal in India, SEBI in December issued show-cause notices to all 12 companies.
Experts now say Hindenburg no longer casts a shadow on Adani. The group continues to close giant deals (the $1.2 billion takeover of Haifa Port in Israel, for instance), and is preparing to undertake new investments worth Rs7 lakh crore over 10 years. The bottom line, too, has never been better. Adani Group recently ended the first half of the fiscal year by setting two records―a combined pre-tax profit of Rs43,688 crore and cash balances of Rs45,895 crore.