Embattled billionaire Gautam Adani, who escaped the 2008 Mumbai Taj Hotel terror attack and a kidnapping experience in 1998, is walking out of 2023 after incurring a $35 billion loss from the Hindenburg disaster.
According to Bloomberg Billionaires Index data, the 61-year-old tycoon had the greatest decrease in his personal worth globally following the Hindenburg scandal and subsequent inquiry by markets regulator Sebi on suspicions of share price manipulation.
During the pre-Hindenburg era, the maverick businessman's money experienced a gravity-defying one-way movement, propelling him to the world's second richest man for a brief while. Adani is now the second richest Indian after Mukesh Ambani, with an estimated worth of $85 billion. The school dropout is now ranked 15th in the world list of billionaires, having lost roughly 29% of his fortune in the company's biggest crisis in its history. The overall market value of all ten listed Adani equities is now under Rs 14 lakh crore, down from approximately Rs 19 lakh crore before the publishing of the Hindenburg report.
During the year, over 60% of Adani's value was wiped off due to nonstop selling of Adani stocks. The first indication of comfort for the business tycoon came on March 2 when US-based GQG Partners purchased interests in four Adani equities totaling Rs 5,460 crore. Since then, the fund managed by NRI Rajiv Jain has increased its holding in Adani stocks.
The Ahmedabad-based company has also been seeking capital to handle debt, which was not only mentioned in the Hindenburg research but has previously been a source of investor concern. Adani Group's total net debt was lowered to Rs 180,371 crore at the end of the September quarter. Its net debt to trailing-12-month EBITDA ratio was 2.5x, the lowest in the previous ten years.
Adani shares have risen in recent weeks as a result of the BJP's victory in three state assembly elections in MP, Rajasthan, and Chhattisgarh. Investor confidence was also reinforced as the US government determined that Hindenburg's charges of corporate fraud were irrelevant before approving a $553 million loan to the group for a container facility in Sri Lanka.
Last month, the Supreme Court postponed its decision on a series of petitions addressing the Adani-Hindenburg dispute over charges of stock price manipulation, stating that it cannot require a statutory regulator to accept something broadcast in the media as "gospel truth."
"We don't have to accept what is said in the Hindenburg report as ipso facto (automatically) true. That is why we asked the SEBI to look into it. Because accepting something in the report of an entity that is not before us and whose veracity we have no way of checking would be extremely unfair," the Supreme Court bench led by Chief Justice D Y Chandrachud stated.
An previous Sebi examination discovered that some businesses took short positions prior to the publication of the Hindenburg report and benefitted from squaring off their holdings later on when the market fell. Between January 24 and February 27, the market valuation of Adani stocks fell by almost Rs 12.4 lakh billion. By March 9, this had been cut to Rs 10 lakh crore.
Acting on PILs filed in the aftermath of the Hindenburg report, the Supreme Court appointed a six-member panel led by former Supreme Court judge Justice AM Sapre, which released a report in May saying it could not decide whether Sebi committed any regulatory breach.
"At this stage, taking into account the explanations provided by Sebi, supported by empirical data, prima facie, it would not be possible for the committee to conclude that there has been a regulatory failure around the allegation of price manipulation," the six-member panel had stated. The troubled tycoon has branded the Hindenburg report as a combination of targeted falsehoods and old, disproved charges designed to harm the company's reputation and generate profits through a planned drive-down in stock prices.
"The short-selling incident had several negative consequences that we had to deal with." "Despite the fact that we promptly issued a comprehensive rebuttal, various vested interests attempted to exploit the short seller's claims," Adani had stated.
Hindenburg described Adani's ascent to riches as the "largest con in corporate history" in a 106-page study released on January 24. He made serious charges about stock manipulation and accounting fraud schemes perpetrated by the self-made billionaire over the period of decades.
Adani bulls are waiting for the Hindenburg stain to wash away in 2024, given the group's sustained focus on debt reduction and business growth possibilities.
