The Adani Story: A Year After Hindenburg, Markets, and Recovery!

A lot of water has flowed under the bridge since January 24th, 2023. How is the Adani Group recovering from the controversial Hindenburg Report? Does the Adani saga hold more than meets the eye?

Manoj Singh
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Adani Story

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Today on Wednesday, January 24, 2024, Indian billionaire Gautam Adani and investors in his group companies have cause to remember. This date marks the first anniversary of the notorious and controversial report by a U.S. short seller Hidenburg on Adani Group, titled 'Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History!' The report, published on January 24, 2023, triggered a string of problems for the Adani group. A year-long campaign by politicians and business rivals against the group.


A year later, as of January 23, 2024, the total market capitalisation of all the Adani Group Companies stands at Rs. 14.5 lakh crores, almost 25 per cent lower than the Rs 19.23 lakh crore valuation just before the publication of the Hindenburg report on January 24, 2023.

Gautam Adani


Adani's Crucible: Navigating Controversy, Acquisitions, and Financial Retraction

Following the publication of the controversial report, the Adani Group entered into firefighting mode, particularly in response to challenges from hostile political parties, rival business groups and traditional media. Just a few months before the Hindenburg Report, the Adani Group had acquired the NDTV group of channels, promoted by Dr. Prannoy Roy & Family, adding further scrutiny from rival media groups. 

Moreover, the group had to retract its follow-on public offer (FPO) of Rs. 20,000 crore under charges by the short seller that it was overleveraged. 


While announcing the withdrawal, Mr. Gautam Adani, chairman of Adan Group, said,

"In my humble journey of over four decades as an entrepreneur, I have been blessed to receive overwhelming support from all stakeholders, particularly the investor community. It is important for me to confess that whatever little I have achieved in life is due to the faith and trust reposed by them. I owe all my success to them. For me, the interest of my investors is paramount, and everything else is secondary.”

In the weeks following the controversy, the market capitalisation of Adani companies, initially standing at Rs. 19.19 lakh crore, saw a drastic reduction, to a low of Rs 7 lakh crores in February 2023.


Hindenburg Questions

The Market Volatility and Vitality of Adani Group 

Since then, a lot of volatility has flowed under the bridge. Adani Group companies have experienced fluctuations, rising and falling in response to market sentiments and analysts' reports. The volatility in some Adani companies like Adani Green continues but the flagship companies of the group have recovered. The group received a support from private equity investor In March 2023, Rajiv Jain-controlled private equity firms GQG Partners had invested Rs 15,446 crore ($1.87 billion) in four Adani group companies.


Adani Companies

Three months down the line in May 2023, GQG partners put in second tranche investment “Our overall shareholding in all companies is higher than March 3, 2023," Rajiv Jain, Chairman, CIO and portfolio manager GQG Partners, said. “The total investment is now close to $2.2-2.4 billion approximately in over a dozen separate accounts....we own these (shares) in multiple accounts." 

The support from institutional investor lie GQG Partners helped the group in improving its market reputation and valuation.


Senior business journalist and well-known on policy analyst, K. Yatish Rajawat, believes that the short selling attack on Adani has a larger lesson for the India corporates. It transcends Adani and intertwines with the resurgence of Indian financial markets and economy. 

He says, "Hindenburg short is a classic example of weaponizing data, markets, and profits to attack a corporate group and the Indian  economy. This isn't a simple short sell; it involves several elements that are very dangerous, especially the use of traditional media and social 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 crash.”

K Yatish Rajawat

The Adani Group market cap still has a some recovery to make, but the group has revived its capital expenditure plan 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. 

Indian corporates need to learn that it is possible to weaponize data and social media to attack not just reputation but valuation and assets now.