IDEAS for the ADANI Group to deal with Hindenbur report

View of Adani’s Mundra Port. 2018.
  • This article gives a perspective on Adani Group share price fall, Suggestions for the Adani Group and Examples how some of its investments might help India geopolitically.

Share prices of the Adani Group (AG) companies dropped, markets fell by some 874 points on Friday 27/1/23 upon questions raised about the Adani Group in the Hindenburg report.


This article seeks to provide a perspective and humble suggestions for the AG. At the outset must disclose that I am Chartered Accountant, as on 27/1/23 hold 90 shares of Adani Power, 204 shares of Adani Ports and 65 shares of Adani Wilmar. On January 27 I applied for 8 shares in Adani Enterprises. Further, I have no interest or association with the AG.


According to media reports banks asked the AG to raise equity contribution due to increasing debt levels. Thus, the AG planned for a Rs 20,000 crore follow-up public offer (FPO). Note that it a little lower than India’s biggest public issue of Rs 21,000 crs by the government owned Life Insurance Corporation of India and Coal India’s FPO of Rs 22,558 crs. The issue closes on January 31.


The anchor book for the FPO was oversubscribed on Wednesday 25/1/ with allocation to 39 investors, aggregating about Rs 5,985 crs. (Business Standard 26/1/). 


Subsequent to the release of Hindenburg Research report many group shares corrected. The 2 day, January 26-27, correction was reported by the Business Standard on January 28.

% Change in Adani Group Company Share Prices in 2 days                                                    

Name of Company

% Change

52week Low

52week  High


1.Adani Transmission





2. Adani Total Gas





3. Adani Green Energy





4. Adani Ports





5. Adani Enterprises AE





6. Adani Wilmar





7. Adani Power





Source last three columns HDFC Securities.

Table above excludes Ambuja Cements -23.5%, ACC -19.4%, NDTV -9.7% since they were acquired in 2022. Also, the first two are decade old companies and for this purpose not included in share prices of Adani Group stocks.


Investors would however, be concerned, how the AG shall merge their operations, value of synergies and generate cash flows to return debts taken to buy these companies.  


A review of the above show that share prices are above their 52 week lows. However, in case of gas and power companies the closing share prices are much above the 52 week lows. This is because of an upturn in those businesses due to a change in the macros.


Surely, prices have corrected from their 52 week highs. Seasoned observers of the market might agree that when share prices go up unreasonably, prices have a way of correcting themselves.


The FPO issue price of AE was higher than the market price on 27/1/. Chairman of Business Standard T N Ninan wrote in Weekend Ruminations on 28/1/, “Dhirubhai had rounded up 'Friends of Reliance' & launched a counter-attack on the bears. However, difference here is Adani group’s stocks have already been on a slide for some months.” 


Times have changed so a repeat of 1980s may not be possible.


Since the State Bank of India stock fell by about 5% on account of concerns of over-exposure to the Adani Group, the bank issued a clarification that its exposure to the AG was well below the RBI’s Large Exposure Framework and was secured by cash generating assets. (Business Standard January 28).


Many of the group companies are backed by sound operating assets and cash flows so it is not that businesses are on paper and devoid of financials.


The public also needs to realize that the AG is mostly present in the infrastructure sector where gestation periods are long and whose performance is tied to the Indian economy’s growth. 

Road that leads to Mundra Port. 

Tata Motors Showroom, Mundra.  

Here are some suggestions for the Adani Group

1.  For each company referred to in the table above certain key data should be placed in public domain for e.g. 


Adani Ports – Number of Ports state wise, Cargo volume handled. 


In 2018, I walked around the external area of Mundra Port to realise scale of operations and spoke to locals who were all praise for the employment it has generated and infrastructure created.


Adani Wilmar (foreign promoter 43.97%) – Volumes of Edible oil, wheat flour and rice sold to give an idea of B2C operations.


Adani Transmission (foreign promoter 8.79%) - number of transmission projects and availability.


Adani Green Energy (foreign promoter 6.28%) – locked in capacity and operational capacity.


According to this MINT report, “France’s TotalEnergies SE and Adani Group have agreed to invest $50 billion over the next 10 years in India to produce green hydrogen.”


Adani Total Gas  (foreign promoter holds 37.4%) – Volumes CNG, PNG and number of dealers.


Note that Adani Wilmar, Green Energy, Transmission and Gas have foreign equity shareholding, some of which exceeds 30%. So should those company’s debt be solely attributed to the Adani Group is worth pondering over.


Adani Power-total thermal capacity, average plant load factor and long term purchase tie ups.


Adani Enterprises-Number of airports operated, roads constructed in kms with ongoing projects like Ganga Expressway, solar modules manufactured and mining volumes.    


Also, in a way Adani Enterprises (AE) is playing the role of an incubator for new businesses in the group. When a stake is sold to a partner it is most likely at a profit.


2. The Group must prevail on the media to stop writing about Gautam Adani as the richest man in the world. Learn from Harshad Mehta, Nirav Modi and Vijay Mallya. It is better to avoid attracting attention and envy.


3. In the last few years, the AG has acquired numerous businesses and expanded capacity. Like the BJP can improve communicating whilst affecting change ditto for the Adani Group about its’ businesses. 


Public including investors wish to know more about the company’s acquisitions, plans, achievements and way forward. This also prevents speculation and miscommunication by vested interests. Shareholders visits to plants might help.  


4. What is the group debt of companies that are majority owned by the AG. Of this how much is borrowed from Indians Banks and foreign debt. 


5. Having the Indian Flag in the background is the prerogative of and suits ministers more than it does India Inc., esp. not those whose companies are facing allegations. 


Also read Adani’s point by by point response to allegations


6. During the 2G scam, Ratan Tata made the mistake (no offence meant to a contributor) of refuting allegations himself. It is always better for professional managers to be the face of the group in such situations for e.g. how Mr MS Prasad of Reliance Petroleum was during the standoff with Mr Anil Ambani.


7. Investors and public need to have more confidence in the executional capabilities of the group for which the Adani Group must inform, humbly, of projects successfully executed. Earlier, many had doubts on the ability of Reliance Industries’s team to succeed in the retail space but they have proved all wrong.


In the same vein, public wishes to know of the AG’s management strength. Once known, it will enhance confidence even though most realize that planning and implementing such huge projects cannot be done by one man or even a single digit team. 


Two key observations. One, do not plan FPO before Budget due to uncertainties on policies and tax rates. Two, without commenting on the right or wrongs of the NDTV acquisition, it surely upset members of the Lutyens Delhi Club and a fall out was expected. What better time than creating doubts in investors mind before the FPO? 


Somehow, one gets the impression that the AG did not prepare for attacks that we are seeing now.


It must realize that it is no longer a small Amdavad headquartered group but an important part of India’s corporate landscape. Thus, a change in approach is required. It must be prepared to deal with more attacks in the run up to the 2024 Lok Sabha elections. 

Mahadev Mandir near Mundra Port. Original temple, Chokhanda Mahadev, destroyed in 2001 Kutch earthquake.

Moves by the AG that might help India geopolitically 

It recently acquired a state owned Israeli Haifa port for $ 1.15 billion. See video . Earlier China's Shanghai International Port Group (SIPG) opened a new port across the bay in Haifa. This deal could help Israel become a regional trading hub and keep the Chinese away.


The AG, “signed a Build Operate Transfer (BOT) agreement with Sri Lanka’s largest listed company John Keells Holdings and the Sri Lanka Ports Authority (SLPA) to jointly develop the Colombo West International Container Terminal (CWICT) at the strategically advantaged Colombo Port.” Source The same report in states that, “For India, the deal meant a potential advantage, both commercially and strategically, especially next to the China-backed Colombo International Container Terminal (CICT), where China Merchants Ports Holdings holds 85% stakes in a BOT agreement spanning 35 years.” India does not have deep water ports


According to a September 2022 report in the Financial Express, a subsidiary of Adani Power is committed to deliver power to Bangladesh from a dedicated transmission line and a 1600 MW coal-fired plant in Jharkhand.  Whenever  I visit the the Dhakatribune or Dailystar websites, read about power cuts. Hope the flow of power to Bangladesh has started and their power shortage reduced. For a contrarian view read

Clearly, such deals would result in Advantage India. There might be other deals that are not in public domain. Also read report on Lanka investment in The Hindu


If the Adani Group’s investments in renewable energy and green hydrogen succeed it would reduce India’s dependence on oil imports which would have a positive multiplier effect on India’s economy. Hope Reliance succeeds too for India’s sake. 


Devangshu Datta wrote in Business Standard (28/1/) that about half the proceeds of the Adani FPO will be directed towards its green hydro projects. Those benefitting from India’s dependence shall make every effort to stop India from reducing crude oil imports.   

Kalpvraksh tree in Bhadradeshwar Jain Mandir, near Mundra. 

A New Way of Working

This Bloomberg article in the Economic Times seems to suggest that the Adani Group ventures into multiple sectors that “framers of our industrial policy have decided as priorities for India’s growth” for e.g. solar panels and renewable energy. 


So is the Modi government encouraging private sector to undertake such investments because the public sector cannot do so as swiftly and well or the old private industry titans are too risk averse!


As long as bank loans are secured by assets and businessmen willing to take risks, should the public be worried? OR are Indians going to envy a risk taking businessman’s making profits. Is that not an example of negative thinking? 


Public should not be unduly concerned that the AG has fewer Big Six accounting firms as auditors. The role of a Big 4 firm in the Satyam case is still fresh in our minds. And who can forget Enron’s Big Accounting firm. Reliance Industries Limited has an unknown statutory auditor for decades. That has not affected perceptions or valuations.


It is also possible that Western research houses are unable to relate to the risk-taking abilities of the AG or and the intertwining of such investments to further India’s progress.


Having said the above, regulators and banks must keep a close watch on the AG’s financials, atleast for the next few years.


Those who think this attack will scare Gautam Adani might like to know that around 1998 he was kidnapped by the Underworld and was having dinner at Taj Mahal Hotel, Mumbai when 26/11/ happened.  


Author is a senior Chartered Accountant, ex Hindustan Lever.  All pictures by author who visited Kutch in January 2018.

Utmost care taken in culling out data. Errors if any are unintended. Do mail me with with sources, and if found admissible, this author shall gladly correct his errors.    


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4. How the BJP can affect change

5. Ideas how India can realize potential

6. Decoding Cyrus Mistry Dec 19 statement

7. How India can achieve 10% GDP growth

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