Resurgent Adani Debunks ‘Power Of Lies’

Gautam Adani opens his first public salvo against what he sees as malicious lies targeted specifically to his group and charts out a course of robust public engagement with his non-financial stakeholders.

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Just a day past the first anniversary of the Hindenburg report that sought to impale Gautam Adani on account of a massive short-selling, scam, the gentleman himself has come up with an uppercut against all the ‘falsities’ plied against him.

A video is doing rounds on social media that talks about the supposed response by Gautam Adani to the Hindenburg Report a year after it came out.

This was ‘breakfast news’ for the readers, just as the Hindenburg report had been for Adani, for he writes how the news came at his breakfast table as a “fatuously self-styled as a research report’. 

“Lies and baseless allegations against us were nothing new. So, after issuing a comprehensive response, I thought no more about it. But as they say, a lie crosses the world before truth ties up its shoelaces.” 

This is some chutzpah from a man who has been besieged from so many quarters, starting with Rahul Gandhi and now West Bengal Chief Minister Mamata Banerjee sweeping him out from the Rs 25,000 crore Tajpur deep sea port project.

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Silent Resilience: Adani’s Strategic Move Amidst Backlash

The political ramifications of the alleged scam were huge, which is possibly why Gautam Adani had remained silent on the issue, gathering his unique arsenal by announcing huge investments: a $601 million fundraising for Adani Ports and a commitment to invest $24 billion in renewable energy over the next five years in Gujarat. 

Naturally, Adani has likened the Hindenburg report to a double-edged sword: financial and political

He writes that the impact of short-selling ‘attacks’ is usually limited to financial damage, but this report had implications and impacts that were both financial and political “each feeding off the other”

He describes the attack as ‘corrosive enough to substantially erode our market cap’. He argues that the capital markets are more ‘emotional than rational’ and laments that what pained him most was that a vast swath of small investors lost their savings. 

What saved the situation was that the better-informed community of lenders and rating agencies saw the game through and stood by the group’s ‘solid assets and robust disclosures’, or else this could have had a debilitating effect on any country by crippling several projects, from infrastructure to seaports, airports and power supply chain. 

Adani mentions that what helped the group most was the “stake sales in our group companies to investors of immaculate global standing such as GQG Partners and QIA”

“By pre-paying Rs 17,500 crore of margin-linked financing, we insulated and ring-fenced our portfolio from market volatility. 

Adani makes a case for himself in the very issue of opaqueness that his group has been accused of, writing that “We focussed on transparently outlining facts and narrating our part of the story. This led to a declining effect of negative campaigns against our group.” 

As proof of the pudding of the changing public perception, Adani points out to the ‘significant growth in our stakeholder base’

“The group continued its investments, evidenced in our asset base growth to Rs 4.5 lakh crore. 

Adani swears innocence in not paying enough attention to the group’s ‘outreach mechanisms’.

“We had all along naively believed that our non-financial stakeholders too knew us, that our financials were robust, our governance was impeccable and our roadmap to growth was measured, and that we played an important role in building India’s critical infrastructure.” 

This debilitating experience will have taught the group to chart out its future course of action, at the helm of which will be ‘actively engaging with our non-financial stakeholders’, Adani writes.

The Bottom Line

Gautam Adani, responding to the Hindenburg report that aimed to damage his reputation and the Adani Group's financial standing, has demonstrated resilience and confidence. Despite facing challenges from various quarters, Adani has asserted his innocence, emphasizing the transparency of the group's operations and financial strength. 

The experience has prompted the Adani Group to focus on actively engaging with non-financial stakeholders, addressing concerns and building a more robust outreach mechanism. Adani highlights the support from informed lenders and rating agencies, as well as strategic stake sales, which helped insulate the portfolio from market volatility. 

The episode has not only showcased Adani's determination but also led to a significant growth in the group's stakeholder base, reinforcing public trust and contributing to the continued growth of the Adani Group's asset base.