India’s Adani hits back at Hindenburg, insists it’s been fully leaked

By Jayshree P Upadhyay, Aditya Kalra and Aditi Shah

NEW DELHI (Reuters) – India’s Adani Group issued a detailed response on Sunday to a Hindenburg Research report that sparked a $48 billion rout in its shares, saying it was complying with all local laws and had done necessary regulatory disclosures.

The conglomerate run by Asia’s richest man, Indian billionaire Gautam Adani, said last week’s Hindenburg report was aimed at enabling the US-based short seller to make gains, without citing any proofs.

For Adani, 60, the stock market crash was a dramatic setback for a school dropout who rose rapidly in recent years to become the world’s third-richest man, before slipping last week to rank seventh on the Forbes rich list.

The Adani Group’s response comes as its flagship company, Adani Enterprises, continues its $2.5 billion stock sale. This was overshadowed by the Hindenburg report, which flagged concerns about debt levels and the use of tax havens.

“All transactions we have entered into with entities that qualify as ‘related parties’ under Indian accounting laws and standards have been duly disclosed by us,” Adani said in the 413-page response posted Sunday evening.

“This is rife with conflicts of interest and is intended solely to create a false securities market to enable Hindenburg, a recognized short seller, to achieve massive financial gain through illicit means at the expense of countless investors,” he added.

Hindenburg did not immediately respond to a request for comment on Adani’s response on Sunday.

Its report had questioned how the Adani Group had used offshore entities in tax havens such as Mauritius and the Caribbean islands, adding that some offshore funds and shell companies were “surreptitiously” holding shares in Mauritius’ listed companies. Adani.

The research report, Adani said, made “misleading claims about offshore entities” without any evidence.

Adani said Thursday he was considering taking action against Hindenburg, who responded the same day saying he would welcome such a move.

Hindenburg’s report also states that five of Adani’s seven largest publicly traded companies reported current ratios, a measure of liquid assets minus current liabilities, of less than 1, which it said suggests “liquidity risk.” in the short term increased”.

He said Adani’s main listed companies had “substantial debt”, which put the whole group in a “precarious financial situation” and shares of seven Adani listed companies were down 85%. % due to what he called “exorbitant valuations”.

Adani’s response said that over the past decade his group companies have “systematically deleveraged”.

Defending its practice of pledging the shares of its promoters – or key shareholders – the Adani Group said that raising finance against shares as collateral was common practice around the world and that loans are granted by large institutions and banks on the basis of a thorough credit analysis.

The group added that there is a robust disclosure system in place in India and that its sponsor pledge positions in holding companies have fallen from over 50% in March 2020 in some listed stocks, to less than 20%. in December 2022.


The Hindenburg report and its fallout are seen as one of the biggest career challenges for the billionaire, whose business interests range from ports, airports, mining and electricity to media and cement.

Adani’s response included more than 350 pages of appendices that included excerpts from annual reports, public disclosures and prior court rulings.

Hindenburg, Adani said, sought answers to 88 questions in his report, but 65 of them related to questions that were disclosed by Adani’s portfolio companies in annual reports.

The rest, Adani said, relate to public shareholders and third parties, and some were “baseless allegations based on imaginary factual patterns.”

Hindenburg, known for shorting electric truck maker Nikola Corp and Twitter, said he held short positions in Adani companies through US-traded bonds and non-US-traded derivatives. India.

Adani also responded to Hindenburg’s allegations regarding the company’s auditors, saying “all such auditors we have engaged have been duly certified and qualified by the relevant statutory bodies.”

His response comes just hours before the Indian market opens, when the $2.5 billion secondary share sale enters its second day of subscription. Friday’s plunge sent shares of Adani Enterprises below the issue price, raising doubts about its success.

In a separate statement on Sunday, the Adani Group’s chief financial officer, Jugeshinder Singh, said he was focused on selling shares and was confident it would be successful. He also said his key investors have shown faith and remain invested.

“We are confident that the FPO (follow-on public offering) will pass as well,” he said.

(Reporting by Aditya Kalra, Aditi Shah, Jayshree Upadhyay and Anirudh Saligrama in Bengaluru; Editing by Kevin Liffey and Alexander Smith)

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