The worst of the troubles for Adani Group may be over after a scathing report by a US short seller released a year ago triggered a crisis that rattled investors and wiped billions of dollars off the conglomerate’s market value and its billionaire founder’s personal wealth.
Analysts say the situation seems to have turned a corner for chairman Gautam Adani and his group’s recovery will continue in the days and weeks to come.
On Wednesday, India’s Supreme Court ruled a separate probe was not needed beyond the investigation being carried out by the country’s markets regulator, the Securities and Exchange Board of India (Sebi), following Hindenburg’s allegations of financial wrongdoing.
“This may signal a turning point, potentially marking the end of the worst phase of the crisis and positively impacting the group’s standing and investor confidence,” says Nilesh Tribhuvann, founder and managing partner of White & Brief Advocates & Solicitors.
“The Adani Group has been proactive in its recovery, raising over $15 billion through equity and debt, regaining investor confidence and re-establishing its bankability.”
It has been a tough time for Mr Adani and his conglomerate – which has interests in sectors including ports, airports and energy – after Hindenburg last January alleged financial irregularities including stock market manipulation and improper use of tax havens.
The Adani Group has denied all the allegations but the accusations resulted in $150 billion being wiped off the market value of its companies at one point in their wake. Mr Adani also had tens of billions of dollars wiped off his personal wealth.
The matter even sparked a political row ahead of the general election due to be held this year, with the opposition accusing the government led by Prime Minister Narendra Modi of having favoured the Adani Group when it came to awarding contracts. The government and Mr Adani have denied the allegations.
The win in India’s apex court is a major milestone and its significance was reflected on Friday when Mr Adani managed to temporarily regain his position as Asia’s richest man.
He overtook Reliance Industries’ Mukesh Ambani as his net worth rose $7.7 billion in a single day to $97.6 billion on the Bloomberg Billionaires Index. The index on Sunday showed Mr Adani has since slipped back below Mr Ambani, with wealth at $94.5 billion. Mr Ambani’s wealth stood at $97.5 billion. However, year-to-date Adani Group’s founder has still managed to increase his net worth by more than $10 billion.
Mr Adani’s relief at the Supreme Court judgment was clear from his post on the social media platform X, formerly Twitter, when he said “truth had prevailed”.
“Our humble contribution to India’s growth story will continue,” he wrote.
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