India's Adani Group says 'misleading' reports have not affected its financial status

India's Adani Group says its financial status remains unaffected despite “misleading” reports, in its latest rebuttal to a report from Hindenburg Research in January.

The Ahmedabad-based conglomerate has “rebounded strongly since the release of a short-selling report in January 2023", it said in a release on Saturday, without mentioning New York-based Hindenburg.

The Hindenburg report accused the Adani Group of stock manipulation and improper use of offshore tax havens, as well as raising concerns about its high level of debt. Adani Group has vigorously denied all the allegations.

Adani Group's four largest companies – Adani Enterprises, Adani Ports, Adani Green and Adani Power – have all gained more than 100 per cent from their low points in 2023, it said.

Adani Ports, the most widely-held institutional stock in the group's portfolio, and Adani Power are now trading at levels above their price before the Hindenburg report was released, “indicating a lack of trust in these misleading reports”, it said.

Their share prices settled higher at the close of trading in Mumbai on Friday, up 0.9 per cent and 3.3 per cent, respectively. Adani Green added 2.1. per cent, while Adani Enterprises ended the week 1.3 per cent higher.

“The misleading reports on Adani Group, India's largest critical infrastructure developer that has undertaken several projects which are of strategic priorities for the country's development, have been unsuccessful in having any substantial impact on the group's business performance as well as its ability to create shareholder value,” it said.

There had been earlier signs that Adani Group was brushing off the Hindenburg report. In May, it reported that first-quarter net income at its flagship Adani Enterprises surged 138 per cent to 7.22 billion rupees ($88.2 million). Revenue rose 26 per cent to 313.5 billion rupees.

The group's portfolio of listed companies posted earnings before interest, taxes, depreciation and amortisation of 235.3 million rupees, a 42 per cent jump year-on-year.

“Importantly, the Adani Group operates within the bounds of the law and under the scrutiny of regulatory authorities in respective jurisdictions,” it said.

“The allegations are based on false information and only targeted to malign the group's image but have no substantial impact on the group's day-to-day operations.”

Hindenburg's allegations rattled investors, resulting in more than $150 billion being wiped off the conglomerate's market value in the weeks following the report.

Adani Group has repeatedly denied any wrongdoing. It even released a 413-page response to Hindenburg in late January to shoot down the allegations.

The allegations also caused a plunge in chairman Gautam Adani's wealth, resulting in the billionaire losing the title of Asia's richest person.

Although the crisis sparked a political row and shook investor confidence, the group's shares have managed to claw back some of their losses over the past few months but have yet to fully recover. Shares in Adani Enterprises are still down more than 36 per cent year-to-date.

“In addition, the rating agencies have reaffirmed the ratings of all the listed group companies. This has allowed continued market access,” Adani Group's statement said, noting that it was able to raise 179.5 billion rupees from international and domestic banks, as well as capital markets.

“The trust and confidence demonstrated by these investors underscore the strength of the group's businesses and its commitment to high governance standards,” it said.

Adani Group also highlighted investments made by global organisations in recent months, which included $381 million from Abu Dhabi's International Holding Company, the UAE's most valuable holding company.

Other major investors in 2023 include the Qatar Investment Authority and GQG Partners. Adani Group also noted that none of its long-position investors have exited their investments from the group.

These organisations “have continued to support, some through increased participation. This is because the group has been a huge value creator for each of these investors”, Adani Group said.

“Stake sales to these investors have also enhanced liquidity at the promoter level, which can be utilised for strategic priorities. The group has raised nearly $10.5 billion through strategic stake sales to long-only investors.”