BENGALURU: Gautam Adani, is standing tall at the end of a difficult year. Shares in the tycoon’s publicly traded firms went into freefall in January after Hindenburg Research accused his empire of stock manipulation and accounting fraud. Adani denied the allegations calling it a “calculated attack” on India, but the infrastructure king’s disdain for his short-seller could soon give way to gratitude, Reuters reported.
The losses were significantly pared back to $64 billion as of Thursday. At one point, the attack had wiped out more than $150 billion in market value from the group’s nine publicly listed companies. Shares of the flagship Adani Enterprises are still 18 per cent lower, but his $27 billion Adani Ports and $24 billion Adani Power are up 36 per cent and 89 per cent since Hindenburg’s missive on January 24. Adani made the most out of the crisis. To shore up investor confidence, it welcomed investors like GQG and Abu Dhabi conglomerate International Holding into some of its companies, helping to dilute the family’s tight shareholding.
The tycoon also paid off loans backed by stock: only 2.4 per cent of the shares in Adani Ports, for example, remain pledged as of the Sept quarter, down from 17.3 per cent at the end of December 2022.
The reckoning stress tested concerns about the group’s rapid growth, leverage and valuations. While net debt remains largely unchanged at around $22 billion, EBITDA – a rough proxy for cash flow – has risen, reducing the consolidated ratio from 3.3 times to 2.5 times. The four largest businesses by market capitalisation trade between 89 and 202 times trailing earnings, per LSEG data. While high, those multiples are lower than the 315 to 845 times before Hindenburg report.
Meanwhile, Adani’s blue-chip backers including TotalEnergies, Wilmar International and its coterie of global banks including Standard Chartered and Singapore’s DBS remained loyal. And Florida-based GQG Partners, which made big bets on the group this year, has seen the value of its investments in five group companies soar
this year.