The Hindenburg Heist: How the Adani Story Looks a Year After!

One year after the research organisation Hindenburg shook not just the Adani Group but the Indian economy and the political firmament, it seems that group has enough gall to resurface!

Exactly one year to the day (January 24, 2023) after the seismic temblor that shook the global share trading, affected by Hindenburg Research’s report that bombed the Gautam Adani group, the company head is seeking a resurgence, despite the fact that the group's market capitalization stands at Rs. 14.5 lakh crores, almost 25 percent lower than the valuation of 19.23 lakh crores just before the publication of the Hindenburg report on January 24, 2023.

The belligerent Gautam Adani will be advantaged by the recent Supreme Court decision, in which it dismissed a clutch of petitions that had argued that the apex court set up a Special Investigative team to probe the Hindenburg accusations on short selling by the Adani Group.

Why is the Sebi Report Exonerating Adani Crucial?

The most important aspect of SEBI’s investigation in the Hindenburg Report is a very crucial element in India’s biggest Value Heist by US-based short sellers.

It also raises many questions about the vulnerability of the Indian stock market and a foreign deep state attack on Indian businesses spreading its wings across the globe.

SEBI Probes: Unraveling Foreign Investors Behind Adani Shorting - Understanding Their Ownership, Motives, and How They Evaded Scrutiny in the Major Market Scandal

The court said that since the market regulator, Securities and Exchange Board of India (SEBI) is already investigating the allegations, appointing another investigative team would amount to saying the court is not satisfied with the SEBI findings even before the board has submitted its report.

This gives the atomised group time enough to enhance its market position, which the seem to be confident shall work out smoothly, as seen can be read from Gautam Adani’s statements at the Vibrant Gujarat Global Summit that took place between January 10 and 12.

Adani Group's Resilience: Court Relief Paves the Way for Major Investments in Renewable Energy and Sustainable Initiatives

This relief by the court gives the never-say-die Gautam Adani enough time to proceed with fundraising plans, as demonstrated by Adani Ports announcing a $601 million fundraise. Furthermore, Adani has committed to investing $24 billion in renewable energy over the next five years in Gujarat, signifying a significant move towards sustainable initiatives.

The Adani Group still has a considerable recovery ahead in terms of Market Capitalisation, but the group has committed to a capital expenditure of over ₹7 lakh crore. In the second week of January 2024, the Adani Group announced investments totalling 624 billion rupees in the Indian states of Maharashtra and Telangana.

Gautam Adani, the 61-year-old Indian billionaire, has actively contributed to Prime Minister Narendra Modi's vision. Speaking at the Vibrant Gujarat Global Summit, he expressed a strong belief in the India Story, appreciating Prime Minister Narendra Modi's vision for merging grand ambition, massive scale, meticulous governance, and flawless execution.

Total Recall: Adani's Tale a Year After the Hindenburg Report

This first anniversary of the Hindenburg allegations calls for a recall of what happened, and what all it means for the future of the share markets.

On January 24 last year, the short-selling investigating company had released a report titled Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History!

The Hindenburg accusations had not only affected Adani but also raised questions about the integrity and fundamentals of other Indian corporate entities, making them vulnerable to scrutiny by various interested parties.

As of January 23, 2024, the total market capitalization of Adani Group Companies stands at Rs. 14.5 lakh crores, almost 25 percent lower than the valuation of 19.23 lakh crore just before the publication of the Hindenburg report on January 24, 2023.

Following the controversial report's publication, the Adani Group swiftly entered firefighting mode, particularly in response to challenges from hostile political parties and journalists.

A few months before the Hindenburg Report, the Adani Group had acquired the NDTV group of channels, promoted by Dr. Prannoy Roy & Radhika Roy, adding further intensity to the unfolding Adani saga.

Consequently, the group had to retract its fully subscribed follow-on public offer (FPO) of Rs. 20,000 crores.

In the weeks following the controversy, the market capitalisation of Adani companies, initially standing at Rs. 19.19 lakh crore, saw a drastic reduction, halving in value.

Businesses are built and run by visionary entrepreneurs, not by day traders, short sellers, or market punters. Gautam Adani is surely not a short seller but a long-run horse who has been running and winning races for over four decades.

Volatility Factors: Unveiling Fluctuations, Investor Concerns, and the Deeper Impact on India's Financial Landscape

Since then, a lot of water has flowed under the bridge. Adani Group companies have experienced fluctuations, rising and falling in response to market sentiments and analysts' reports.

According to a recently published report by Forbes Advisor, these fluctuations can be attributed to various factors. It says, ‘While historical returns and market capitalization of the majority of Adani Group companies remain appealing, high price-to-earnings (PE) ratios, intraday volatility, and limited dividend yields may discourage some investors.’

Senior business journalist and well-known columnist on policy matters, K. Yatish Rajawat, believes that the Adani story holds more than meets the eye. It transcends Adani and intertwines with the resurgence of Indian financial markets, showcasing Corporate India's growing influence on the global stage.

He states, "Hindenburg is a classic example of using data, markets, and profits to attack the economy. This isn't a simple short sell; it involves several elements that are very dangerous, especially the use of traditional media to bring down a corporate entity and a rising market. Remember, on the day the report was released, the entire market also experienced a downturn.”

The India Story: Gautam Adani's Belief in Grand Ambition and Scale

The ‘dangerous elements’ that Rajawat talks about is what the apex court wants SEBI to trace and eventually eliminate so that there is no such tsunami of short-selling in the future. Eliminating these practices alone can insulate the Indian economy from such financial tsunamis in the future.

But now it has become evident that Gautam Adani firmly believes in the fundamentals, whether it's the Indian economy, political leadership, or his own group companies and vision. As they say in the stock market, both the bull and bear make money, but they do not build businesses.

Businesses are built and run by visionary entrepreneurs, not by day traders, short sellers, or market punters. Gautam Adani is surely not a short seller but a long-run horse who has been running and winning races for over four decades.

Copy Editor: Sujit Cahakraborty