There are some new developments in the Adani Hindenburg case that you must know.
The question-and-answer session continues between Adani and Hindenburg.
In such a situation, after the market opened today, the share price of some Adani group companies was in green and some in red.
However, till 1:30, except for Adani Enterprises and Adani Ports, all other Adani companies were locked in the lower circuit.
The latest development in the Adani Hindenburg case is that Adani Group issued a 413-page report on 29th Jan, Sunday in response to the allegations.
Adani Group has said that Hindenburg through its reports seeks to make financial gains at the cost of innumerable investors.
Adani said that the Hindenburg report is not only an attack on him but also an attack on the independence, integrity, and quality of Indian institutions.
He believes that Hindenburg Research has questioned his authority by ignoring the Indian judiciary and regulatory framework.
Adani also said that the timing of the Hindenburg report suggests a malicious intent to influence the planned FPO of Adani Enterprises.
Adani, in its reply, said that none of the 88 questions asked by Hindenburg were based on independent or journalistic facts and conclusions.
As per him, 65 of the 88 questions pertained to matters already disclosed by Adani companies on its website, annual reports, and financial statements.
Out of the rest 23 questions, 18 questions related to public shareholders and third parties and not related to Adani portfolio companies.
And finally, according to Adani Group, the rest 5 questions are allegations based on imaginary facts and patterns.
Adani Group on being over-leveraged said that its companies reduced their debt levels over the past decade through operational excellence.
As per him, Adani company's EBITDA has grown at a CAGR of 22% in the last 9 years while its debt grew at a CAGR of 11% in the same period.
Due to this, the net debt to EBITDA ratio of Adani companies has come down from 7.6x to 3.2x.
Second, Adani Group said it has reduced its exposure to banks by diversifying its long-term debt profile over the past six years.
Addressing the concerns of high promoter pledging in Adani companies, Adani Group said that since 2020, promoter pledging has come down.
Hindenburg also raised a question as to why the independent auditor of Adani Enterprises and Adani Gas is a small firm,
to which Adani Group replied that their auditors are duly certified and qualified by the relevant statutory body.
Also, they have been appointed in compliance with applicable laws. He also added that there are more than 35 statutory audit firms
that conduct internal audits of various entities of Adani Enterprises, including some of the Big 6 companies.
In addition, Hindenburg said that Adani Enterprises has had 5 CFOs in the last 8 years, which is a significant red flag.
In response, Adani said that many of his executives are still part of the organization in other roles,
while some have left the company due to personal reasons.
Hindenburg's next claim was that Adani Group is controlling the public float of its listed companies
through foreign investment entities run by them or related to them.
But Adani has said in his report that all these are public shareholders and he has no control over who buys or sells the shares of a listed company.
Talk about the allegations of fraud and scams on Adani's younger brother Rajesh Adani and brother-in-law Sameer Vora,
Adani Group believes that all these cases are already part of public disclosure and dismissed in its favor in the past are have happened.
Regarding Gautam Adani's elder brother Vinod Adani, the Adani Group said that
he does not hold a managerial position in any of Adani's listed companies and has no role in the operations of these companies.
Lastly, the CFO of Adani Group has also said that he is confident of the successful subscription of FPO of Adani Enterprises
and according to him, share price volatility will not impact the value of his business.
In response to Adani's 400-page report, Hindenburg said that Adani Group has ignored his important questions and confirmed his findings.
Hindenburg said that Adani Group is trying to hide its fraud through nationalism.
Hindenburg said that the Adani Group linked its growth and its chairman Gautam Adani's wealth to India's success, a claim he disagrees with.
They demand that India is a vibrant democracy whose future is exciting.
According to Hindenburg, many allegations are still unanswered.
Such as suspicious transactions through offshore accounts and clarification between the Adani Group and a Chinese national, Chang Chung-ling.
Hindenburg said that of the 413-page report to the Adani Group, only 30 pages focused on the issues raised by him.
Overall, Hindenburg said he was not satisfied with the Adani Group's response.
Have you invested in Adani stock? If so, how down is your portfolio at the moment? Tell me in the comments.
We covered this issue in detail yesterday, so if you want to understand it in depth, do check out our video.
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