Adani hits back at Hindenburg, says it has provided all disclosures

  • Adani issues 413-page rebuttal to Hindenburg report
  • The US short seller’s report triggered falls in Adani shares
  • Adani says complies with laws, required disclosures
  • Adani CFO is confident the $2.5 billion share sale will succeed

NEW DELHI, Jan 30 (Reuters) – India’s Adani Group issued a detailed critique on Sunday of a Hindenburg Research report that triggered a $48 billion decline in its shares, saying it complies with all local laws and had made the necessary the regulatory disclosures.

The conglomerate led by Asia’s richest man, Indian billionaire Gautam Adani, said last week’s Hindenburg report was intended to enable the US-based short-seller to book profits, without citing evidence.

For 60-year-old Adani, the collapse in the stock exchanges has been a dramatic setback for a school dropout who rose rapidly in recent years to become the world’s third richest man, before last week he fell to seventh place on the Forbes rich list.

Adani Group’s response comes as its flagship company, Adani Enterprises ( ADEL.NS ), moves ahead with a $2.5 billion share sale. This has been overshadowed by the Hindenburg report, which flagged concerns about debt levels and the use of tax havens.

“All transactions entered into by us with entities that qualify as ‘related parties’ under Indian laws and accounting standards have been duly disclosed by us,” Adani said in the 413-page response issued late on Sunday.

“This is fraught with conflicts of interest and intended only to create a false market for securities to enable Hindenburg, an admitted short seller, to book massive financial gain through improper means at the expense of countless investors,” it added.

Hindenburg did not immediately respond to a request for comment on the Adani response on Sunday.

The report questioned how Adani Group has used offshore entities in tax havens such as Mauritius and the Caribbean islands, adding that certain offshore funds and shell companies “covertly” own shares in Adani’s listed firms.

The research report, Adani said, made “misleading claims around offshore entities” without any evidence whatsoever.

Adani said on Thursday it was considering taking action against Hindenburg, which responded the same day by saying it would welcome such action.

Hindenburg’s report also said five of seven key listed Adani companies have reported current ratios, a measure of liquid assets minus current liabilities, of below 1 which it said suggested “an increased short-term liquidity risk”.

It said key Adani-listed companies had “significant debt” which has put the whole group on a “precarious financial footing” and that shares in seven Adani-listed companies are down 85% due to what it called “skyrocketing valuations” .

Adani’s response stated that over the past decade, group companies have “consistently reduced leverage”.

The Adani group defended its practice of pledging shares to its promoters – or key shareholders – that raising finance against shares as collateral was common practice globally and loans were granted by major institutions and banks on the basis of thorough credit analysis.

The group added that there is a robust disclosure system in place in India and promoter pledge positions across portfolio companies had fallen from more than 50% in March 2020 in some listed stocks to less than 20% in December 2022.


The Hindenburg report, and its fallout, is seen as one of the biggest career challenges to face the billionaire, whose business interests range from ports, airports, mining and power to media and cement.

Adani’s response included more than 350 pages of appendices that included excerpts from annual reports, public disclosures and previous court decisions.

Hindenburg, Adani said, had sought answers to 88 questions in the report, but 65 of them related to matters that have been disclosed by Adani portfolio companies in annual reports.

The rest, Adani said, relate to public shareholders and third parties, and some were “baseless allegations based on imaginary fact patterns”.

Hindenburg, known for shorting electric truck maker Nikola Corp ( NKLA.O ) and Twitter, said it has short positions in Adani companies through U.S.-traded bonds and non-Indian-traded derivatives.

Adani also responded to allegations by Hindenburg relating to the company’s auditors, saying “all those auditors who have been engaged by us have been duly certified and qualified by the relevant statutory bodies.”

The answer comes just hours before the Indian market opens, when the $2.5 billion secondary share sale begins its second day of underwriting. Friday’s dive took Adani Enterprises shares below their issue price, raising doubts about its success.

In a separate statement on Sunday, Adani Group CFO Jugeshinder Singh said it is focused on the share sale and is confident it will succeed. He also said that the anchor investors have shown faith and remain invested.

“We are confident that the FPO (follow-on public offer) will also sail through,” he said.

Reporting by Aditya Kalra, Aditi Shah, Jayshree Upadhyay and Anirudh Saligrama in Bengaluru; Editing by Kevin Liffey and Alexander Smith

Our standards: Thomson Reuters Trust Principles.

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