Beyond Hindenburg: Gautam Adani talks up 'matrabhumi', major projects

Group confident of its governance and disclosure standards, says billionaire in address to shareholders

Seeking to move past the Hindenburg episode, Adani group Chairman Gautam Adani on Tuesday touted his companies’ key projects, such as a 20-Gw wind and solar power facility in Gujarat, India’s largest trans-shipment hub in Vizhinjam, and the Navi Mumbai airport.

He said the group was confident of its governance and disclosure standards and rejected the Hindenburg Research’s report, which was critical of the group, as "targeted misinformation".

 “On the eve of our Republic Day this year, a US-based short-seller published a report to short our stocks just as we were planning to launch the largest follow-on public offer in India’s history,” said Adani while addressing shareholders at the start of Adani Enterprises’ annual general meeting (AGM).

 Hindenburg Research’s report made multiple allegations against the group, including fraudulent transactions and share-price manipulation. Share prices of Adani Group's listed entities took a massive hit after the report went public and forced Adani Enterprises to withdraw the FPO. 

“The report was a combination of targeted misinformation and discredited allegations, the majority of them dating from 2004 to 2015. They were all settled by the appropriate authorities at that time," said Adani. An expert committee set up on the Supreme Court’s order said in May 2023 it did not find any regulatory failure. “While Sebi is still to submit its report, we remain confident of our governance and disclosure standards,” he said Adani.

Adani then turned to his belief in the future of "matrabhumi (the motherland)”. “While economic cycles are getting increasingly hard to forecast, there is little doubt that India – already the world’s 5th largest economy – will become the world’s third largest economy well before 2030…it is well understood that for any economy to implement policy and lay the foundation of growth, a stable government is critical,” he said.

"India's success story of balancing economic growth and a vibrant democratic society has no parallel," he said. "My belief in the growth story of our matrabhumi has never been stronger."

Adani also shared an update on key projects of the group, including the planned copper smelter in Gujarat and the Navi Mumbai Airport project, both of which are on schedule “The Navi Mumbai Airport is preparing for Operational Readiness and Airport Transition by December 2024,” he said. 

Speaking about the Khavda renewables project in Gujarat, Adani, who runs a conglomerate spanning energy, transport and infrastructure, said it would be the “largest hybrid renewables park in the world” and the “most complex and ambitious project” the group has executed.

He added, in the ports business, Adani Ports and SEZ (APSEZ) will commission India’s largest trans-shipment hub in Vizhinjam and a port in Colombo in the next 12-24 months.

In Tuesday’s trade, Adani Enterprises closed at Rs  2,416 per share, flat against its previous day’s close.

Adani’s go-to bankers at Barclays turn cautious

 

For more than a decade, Barclays has been the go-to bank for Gautam Adani, leveraging a relationship forged when only a few global firms were working with the emerging conglomerate.

 

An explosive report by short-seller Hindenburg Research in January has changed all that, prompting the bank to pare its exposure, leaving a hole in an Indian business that’s been a key driver of the firm’s Asian growth for years.

 

Executives at the highest levels are scrutinizing ties with Adani, turning more cautious about adding new business pending a regulatory probe that’s supposed to end next month, according to people familiar with the matter. While Barclays hasn’t closed the door on the group, it’s negotiated repayment on some loans, including financing for a massive cement deal last year with Holcim AG, the people said. 

 

The pull-back is creating tensions within the firm, said the people, who asked not to be identified discussing private matters. Bankers in India want to revive the lucrative Adani relationship after business from the group dried up. Executives in London are more cautious, citing the reputational risks, they said. Bloomberg