27 February 2024

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Adani-Hindenburg saga

Adani-Hindenburg saga timeline: The trouble, the fall and the turnaround

Adani-Hindenburg saga timeline: Adani Group announced on Monday that it has completed full prepayment of $2.15 billion of margin linked share backed financing by March 12, well ahead of the March 31, 2023 deadline. The founders also returned $700 million in debt incurred in connection with the Ambuja Cement transaction.

According to the credit report, the company’s net debt-to-EBITDA ratio fell from 3.81 in FY22 to 3.27 in FY23. Its leverage has been a major investor concern since the US-based research company Hindenburg issued a report against the group, accusing it of stock manipulation and accounting fraud, as well as pointing out that its debt levels were excessive.

Here is a timeline of the Adani-Hindenburg saga

The ‘damning report’

Hindenburg Research published their research ‘How The World’s Third Richest Man Is Pulling The Largest Con In Corporate History’ on January 24, 2023. It claimed that the organisation engaged in questionable practises, asking 88 questions about the group’s source of finances, offshore entities, and other matters. It also stated that it had taken short bets in the company’s equities.

Stock crash

After the report was revealed, the stock prices of the group’s nine companies plummeted, with some losing as much as Rs 1 lakh crore in market value.

FPO & its cancellation

On January 31, the group decided to proceed with Adani Enterprises‘ 20,000 crore follow-on public offer (FPO), which was completely subscribed due to the large number of family offices that invested. However, on February 2, the group cancelled the FPO, claiming a ‘unprecedented situation and present market instability’.

Gautam Adani loses his crown

Adani-Hindenburg saga: Gautam Adani’s position on the global rich list slipped from second to twenty-first in early February as a result of the group’s stock market slump. MSCI, the index provider, stated that it would announce adjustments to the free-float status of some Adani securities.

Adani-Hindenburg saga

Comeback strategy in effect

In late February, the firm made a few revisions to its ambitious plans, suspending work on the 34,900 crore Mundra petchem project and cancelling its 7,017 crore acquisition of DB Power. Adani Green Energy also stated that it is reviewing its expenditure plans worth 10,000 crore.

GQG Partners’ investment

In early March, Rajiv Jain’s GQG Partners invested Rs 15,446 crore in four Adani group companies: Adani Enterprises, Adani Ports & SEZ, Adani Green, and Adani Transmission.

PILs in Supreme Court

In March, the Supreme Court consolidated several public interest litigations (PILs) filed in the Adani-Hindenburg saga into a single case, summoned markets regulator SEBI, and appointed a committee to investigate whether there was any regulatory failure in dealing with the alleged violation of securities laws by Adani group companies.

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Supreme Court extends deadline to SEBI

The report of the SC committee in May stated that there was no evidence of the Adani company breaking existing market regulations. SEBI, on the other hand, was given an extension to submit its report.

GQG Partners doubles down on Adani bet

Adani-Hindenburg saga: GQG Partners expanded their interest in the Adani group by around 10%, bringing its total investment in the group to $3.5 billion. GQG’s founder, Rajiv Jain, stated that within five years, they hope to be one of the largest investors in the Adani group.