A year ago, Gautam Adani, the founder and chairman of Adani Group, faced one of the biggest challenges of his career. A US-based short-seller, Hindenburg Research, published a report accusing him and his conglomerate of fraud and stock price manipulation. The report claimed that Adani had inflated his net worth by over $100 billion in three years through a complex web of offshore shell entities and dubious accounting practices. The report also alleged that Adani had close ties with Prime Minister Narendra Modi and had benefited from preferential treatment by the government.
The impact of the report was devastating. The shares of Adani’s seven key listed companies plunged by an average of 25% in a single day, wiping out $13 billion of his wealth. The Indian regulators launched investigations into the allegations and froze the accounts of some foreign funds that held Adani stocks. The auditor for Adani’s ports business resigned, raising more questions about the group’s financial transparency.
How Adani fought back
However, instead of succumbing to the pressure, Adani fought back with resilience and determination. He denied all the allegations and said that his group complied with all laws and accounting rules. He also said that he did not receive any preferential treatment from the government and that his businesses were based on merit and performance.
Adani also took several steps to improve his group’s fundamentals and reputation. He reduced his debt by selling stakes in some of his businesses to global investors such as TotalEnergies, Qatar Investment Authority, and Warburg Pincus. He also reduced the share pledges by the founders, which had been seen as a sign of financial stress. He won new contracts and projects in various sectors such as airports, renewable energy, data centers, and city gas distribution. He also increased his communication with investors and lenders, holding regular conference calls and webinars.
The results of his efforts were evident. The shares of his companies recovered from their lows and gained an average of 150% in a year. His net worth increased to $120 billion, making him the third-richest person in the world. His group also received positive ratings from credit agencies such as Moody’s and Fitch. His group also cleared some of the regulatory hurdles, such as a Supreme Court verdict rejecting appeals for a special investigation into his coal mining project in Australia.
The future outlook for Adani
Despite his remarkable comeback, Adani still faces some challenges and risks. He still has to deal with the ongoing investigations by the regulators and the questions about his offshore entities. He also has to manage the high expectations of his investors and deliver on his ambitious growth plans. He also has to cope with the environmental and social concerns raised by some of his projects, such as coal mining and port development.
However, Adani has shown that he has the vision, strategy, and execution skills to overcome any obstacle. He has also demonstrated that he can turn a crisis into an opportunity by learning from his mistakes and improving his performance. He has proven that he is not only a successful entrepreneur but also a resilient leader.
Data points
- Adani’s net worth increased by over $100 billion in three years (2019-2022) [Hindenburg Research]
- Adani’s seven key listed companies plunged by an average of 25% in a single day after Hindenburg report [Bloomberg]
- Adani paid back at least $3 billion in debt and pledges in March 2023 [Business Today]
- Adani attracted almost $5 billion in investments from global investors such as GQG Partners [Bloomberg]
- Adani’s seven key listed companies gained an average of 150% in a year after Hindenburg report [Bloomberg]
- Adani’s net worth reached $120 billion as of January 2024 [Bloomberg]