Adani Group hits back at Hindenburg, calls allegations attack on India

The Adani Group has issued a detailed 413-page riposte to New York-based short seller Hindenburg Research wherein it said that "unsubstantiated allegations and misleading narrative are backed by relevant documents". The Ahmedabad-based conglomerate led by Gautam Adani said that it complies with all local laws and had made the necessary regulatory disclosures, adding that the Hindenburg report was intended to enable the US-based short seller to book gains, without citing evidence.

The Hindenburg report has been made with a clear intent to profiteer at the cost of our shareholders and public investors. Its report is neither "independent" nor "objective". It is a manipulative document that is rife with conflict of interest and intended only for creating a false market in securities to book wrongful gain, which clearly constitutes securities fraud under Indian law.

Of the 88 questions posed by Hindenburg, it is pertinent to note that 68 refers to the matters that have already been duly disclosed by Adani Group companies in their respective annual reports, offering memorandums, financial statements and stock exchange disclosures from time to time. Sixteen out of 20 questions are pertaining to public shareholders and their sources of funds, while the balance four are simply baseless allegations.

Needless to say that Hindenburg has created these questions to divert the attention of its target audience while managing its short trades to benefit at the cost of investors. The report claims to have undertaken a "2-year investigation" and "uncover evidence", but comprises nothing other than selective and incomplete extracts of disclosed information which has been in the public domain for years."We take serious objection to Hindenburg that chose to mislead the investors, watchdogs and policy makers at a time when Adani Group has launched country's largest FPO.

Adani Group is deeply committed to its stakeholders, and it is thankful to them for standing with us over the past 30 years. Shockingly, Hindenburg Research's attack on the trust of Adani Group's stakeholders undermines its commitment for the 'Growth with Goodness'," Adani Group said.

Hindenburg Research has come up with a document covering selective and twisted extracts of already disclosed information to raise questions in the minds of Indian and global investors to mislead them about Indian growth story. It is an attack on the trust of Adani Group's stakeholders undermines its commitment for the 'Growth with Goodness'.Adani Portfolio companies have successfully and repeatedly executed an industry beating expansion plan over the past decade. While doing so, the companies have consistently de-levered with portfolio net debt to EBITDA ratio coming down from 7.6x to 3.2x, EBITDA has grown 22 per cent CAGR in the last 9 years and debt has only grown by 11 per cent CAGR during the same period.Equity Injection in the Adani Portfolio Adani Portfolio has raised $16 billion equity under a systematic capital management plan for all the Portfolio companies over the last 3 years as a combination of primary, secondary and committed equity from marquee investors like TotalEnergies, IHC, QIA, Warburg Pincus etc.

The portfolio has developed deep bank relationships with institutions such as JP Morgan, Bank of America Merrill Lynch, Citi, CreditSuisse, UBS, BNP Paribas, Deutsche Bank, Barclays, Standard Chartered, MUFG, DBS and Emirates NBD among others. This has strengthened access to diverse funding sources and structures.

Adani Portfolio companies have demonstrated successful syndication of the banking transactions, resulting in de-risking of the banks in volatile markets. Case in point being Holcim's Indian cement business acquisition with international banks, and Navi Mumbai Airport and Kutch Copper refinery with domestic banks Adani Group companies also have a very strong audit process in order to prevent any deviations from the regulatory obligations and highest legal standards.The Audit Committee of each of the listed verticals is composed of 100 per cent of Independent Directors and chaired by Independent Director.The Statutory Auditors are appointed only upon recommendation by the Audit Committee to the Board of Directors. Adani Portfolio company's follow a stated policy of having global big 6 or regional leaders as Statutory Auditors.

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Hindenburg has deliberately and repeatedly trivialised the change of CFOs to twist this into a narrative.The fact is that many of the CFOs are still part of the organisation in other capacities to take on larger responsibilities as part of our growth stories.Others have left post retirement or to pursue their own entrepreneurial endeavours and continue to work in our association.None of the resignations have ever been made pursuant to any alleged concerns and Hindenburg's baseless narrative.In two sessions (January 25 and 27), the Adani Group firms have lost a whopping Rs 4,17,824.79 crore from their market valuation.

The market valuation of Adani Total Gas plummeted Rs 1,04,580.93 crore, while that of Adani Transmission eroded by Rs 83,265.95 crore. Adani Enterprises market capitalisation (mcap) fell by Rs 77,588.47 crore, Adani Green Energy lost Rs 67,962.91 crore and Adani Ports (Rs 35,048.25 crore). The market valuation of Ambuja Cements declined by Rs 23,311.47 crore, Adani Power by Rs 10,317.31 crore, ACC by Rs 8,490.8 crore and Adani Wilmar by Rs 7,258.7 crore.

Meanwhile, Adani Group has expressed confidence that the Rs 20,000 crore follow-on share sale of its flagship firm Adani Enterprises will sail through. Group CFO Jugeshinder Singh told PTI that there will be no change in offering price or schedule is being considered due to temporary volatility in the market as the follow-on public offer (FPO) of Adani Enterprises Ltd is the best vehicle for strategic institutional investors to own a pie of the conglomerate's fast expanding airports, mining, roads, new energy and data centre businesses.

Also, read- Adani Group-Hindenburg: What options Adani Group have? Anil Singhvi decodes