Billionaires: Gautam Adani emerges stronger a year after Hindenburg hit

Gautam Adani

One of the biggest ever corporate takedowns by a short-seller may have been a blessing in disguise for billionaire Gautam Adani.

A year after US-based short-seller Hindenburg Research accused the Adani Group of fraud and “brazen” stock price manipulation, the Indian billionaire has emerged stronger on some measures of business fundamentals.

His ports-to-power empire has trimmed debt, pared founders’ share pledges, won new backers from the US to the Middle East, bagged landmark projects and begun to communicate more often with investors and lenders.

The fallout from Hindenburg’s report still lingers. While Adani stocks have risen more than $90 billion from last year’s low, they remain about $60 billion short of their pre-Hindenburg peak.

Meanwhile, most of the group’s dollar bonds have recouped their losses.

Critics have continued to question a perceived closeness to Prime Minister Narendra Modi, as well as a web of opaque offshore companies.

Watch: How Gautam Adani lost title as Asia's richest man

The auditor for the group’s ports business resigned last year, adding to questions around its accounting practices.

The conglomerate has said it complies with all laws and follows all accounting rules, while Mr Adani has said that his companies don’t receive preferential treatment from the government.

Much of the conglomerate’s resilience comes from its infrastructure empire – port terminals, power lines, airports, data centres, solar parks and cement plants.

Below is a selection of business metrics on Mr Adani’s empire since the short-seller’s broadside on January 24 last year:

• Hindenburg’s report sent Adani Group stocks into a tailspin, leaving the founders vulnerable to margin calls on their pledged shares.
• Mr Adani and his family prepaid $2.15 billion and have drastically reduced their pledged holdings.
• The group attracted about $5 billion in investments, the bulk of it from investor Rajiv Jain’s GQG Partners, which bought stakes in four Adani companies in March and has ploughed in more money since then.
• The combined market value of 10 listed Adani companies is now at about $175 billion – a jump of about 112 per cent from the record low of $82 billion in February last year.
• Five of them have erased all the losses seen after Hindenburg’s report.

The latest upswing in stocks is being driven by the Indian Supreme Court’s verdict rejecting appeals for a federal probe into Mr Adani’s businesses, and a $553 million investment by a US-backed agency in the group’s port business in Sri Lanka.

The Adani Group, however, needs to bolster analyst coverage. It’s scant for most of its companies except the ports business and the newly-acquired cement makers.

The conglomerate would also benefit from expanding its public float to ward off outsized stock swings.

The conglomerate’s net debt fell 3.5 per cent to $21.72 billion in the six months through September, a presentation filed to exchanges revealed.

Mr Adani rebounded from the short-seller crisis because he’s building or operating some of the biggest infrastructure projects in India.

Data compiled by Bloomberg shows Mr Adani's group handles about half of all shipping containers in India, a third of all coal transported, and about one-fifth of private thermal power capacity.

The billionaire also aligns his business strategies to Mr Modi’s nation-building priorities.

That also points to another possible fault line for the conglomerate – the political risk for Mr Adani whose rise has been almost parallel to Mr Modi’s ascent to power.

One of the biggest continuing overhangs is the local market regulator’s probe into the Adani Group on whether it violated securities laws.

India’s top court asked the regulator on January 3 to conclude its investigation within three months.

Jack Ma

Alibaba Group shares have jumped to a six-month high after billionaire co-founder Jack Ma bought stock, in a much-needed boost for a company weathering internal turmoil and a market rout.

Mr Ma, the once-outspoken billionaire who retreated from public view in 2020 after Beijing clamped down on his companies, Alibaba and Ant Group, bought about $50 million of stock in the last quarter, a source said.

Chairman Joseph Tsai separately bought about $150 million of shares in his first such purchase since 2017.

Alibaba lost more than 40 per cent of its value over the past year, as the company that once defined Chinese e-commerce lost market share to PDD Holdings and underwent a management reshuffle.

Alibaba’s woes, as well as the surprise exit of former chief executive Daniel Zhang, spurred speculation that Mr Ma himself may get more directly involved with his company.

In recent months, the co-founder has stepped up public activity and, last November, broke years of silence to issue a call to arms for employees.

He took to an internal message board to urge Alibaba to “correct its course”. Mr Ma said Alibaba could be successful again with determination and hard work.

It’s unclear whether Mr Ma’s move marks a reversal of a years-long stance.

The billionaire has gradually sold down his stake in the company while focusing on his own projects including philanthropy.

He disclosed plans to unload 10 million shares worth about $870 million on November 21, filings showed.

Amancio Ortega

Fast-fashion billionaire Amancio Ortega’s family office has acquired a Canadian warehouse leased by Amazon.

Mr Ortega’s Pontegadea Inversiones paid about €250 million ($272 million) for the facility in Burnaby, south-east of Vancouver, a representative said.

The purchase adds the nearly 1 million square foot warehouse to a roster of logistics properties owned by Mr Ortega, founder of the Zara clothing brand.

The properties include a facility used by Primark in the Netherlands, bought earlier this month, and a warehouse occupied by Walmart in California, acquired last year.

Mr Ortega is already landlord to Amazon offices in Seattle and owns a warehouse used by the e-commerce company in Dublin. He is landlord to Meta Platforms and Apple, too.

The businessman is the world’s 15th-richest person with a $85.4 billion fortune, according to the Bloomberg Billionaires Index.

His property portfolio is valued at €18.1 billion, making it the largest real estate portfolio among Europe’s family offices.

Mr Ortega began investing in logistics in 2022, when he spent about $1 billion buying warehouses across the US. Purchases in Europe soon followed.

While commercial and premium residential real estate weigh the most in his real estate portfolio, Mr Ortega has diversified into telecom and energy assets.

Still, Inditex, the company he founded and in which he owns 59 per cent, makes up the vast majority of Mr Ortega’s wealth.

Bernard Arnault

French billionaire Bernard Arnault plans to appoint two of his sons to the board of LVMH Moet Hennessy Louis Vuitton.

Mr Arnault was expected to nominate his sons Alexandre, 31, and Frederic, 29, last week, a source said.

The board nominations would then be subject to a vote at the company’s annual general meeting in April.

Mr Arnault and his family own about 48 per cent of LVMH shares and about 64 per cent of voting rights.

Mr Arnault, 74, is the world’s third-wealthiest person, with a fortune of about $161 billion, according to the Bloomberg Billionaires Index.

All five of Mr Arnault’s children work at the company. Delphine, 48, is chief executive of Christian Dior Couture, the group’s second-biggest fashion label after Louis Vuitton.

Antoine Arnault, 46, is responsible for LVMH’s image and communications and is a non-executive chairman of cashmere specialist Loro Piana, which belongs to the company.

He is also vice chairman and chief executive of Christian Dior, the holding company through which the Arnault family controls LVMH.

Alexandre has overseen product and communications at Tiffany & Co for the past three years, while Frederic runs the group’s watch unit.

Jean, 25, is in charge of developing Louis Vuitton’s watch category.