AFTER THE STORM

SIX MONTHS AFTER A HINDENBURG REPORT LED TO A MELTDOWN IN ADANI GROUP STOCKS, THE CONGLOMERATE IS TRYING TO STRIKE A BALANCE BETWEEN GROWTH, CAPEX AND DELEVERAGING ITS DEBT

- ANAND ADHIKARI

GAUTAM ADANI, 61, loves business jargon. Just a few months ago, the billionaire, caught in the cross hairs of the US-based short-seller Hindenburg Research, stumbled upon a new term, ‘permacrisis’. The term, which refers to a prolonged period of uncertainty, was chosen as Collins Dictionary’s word of the year in 2022. It describes the turbulent and uncertain nature of that year, and perhaps also the situation the Adani Group’s Chairman and Founder finds himself in—as he navigates the mother of all existential crises of his three-decade entrepreneurial journey.

Though the challenges still linger—sparked by a Hindenburg report alleging accounting fraud, stock manipulation, and routing of funds through foreign shell companies, all of which the firm has refuted— there is some breathing space. The group, which has a top line of ₹2.62 lakh crore and had lost over $100 billion in market capitalisation at one point, is gradually charting a new course by rebalancing its growth ambitions, slowing down on big-ticket acquisitions, deleveraging, and strengthening its balance sheet. The Adani family recently divested stakes in four group companies to raise $1.87 billion (₹15,500 crore) from global private equity firm GQG Partners. In addition, three companies have board approval to raise funding of $4 billion over the next 12 months. “There will be more equity dilution if they plan to grow at the same pace as earlier. It’s a Catch-22 situation. If growth slows down, the valuations will correct further,” sums up Ambareesh Baliga, a seasoned observer of the markets. But the group has been diluting equity since 2019 when global players like TotalEnergies, Qatar Investment Authority and Abu Dhabi-based IHC group invested a total of $5.79 billion.