Indian Industrialist Gautam Adani Back In The $100 Billion Club a Year After Hindenburg Bombshell

Indian billionaire and the chairman of Adani Group, Gautam Adani has bounced back to the $100 billion club. Adani has recovered much of his wealth a year after the US-based short-seller Hindenburg Research attacked the Adani Group in its report, accusing it of carrying out elaborate fraud over decades.

Once valued at over $150 billion, the Adani Group share prices nosedived after the report was released. However, a year later, the group has bounced back, and Adani's net worth climbed to $100.7 billion on Wednesday, according to Bloomberg. This was after the group received a clean chit from India’s Supreme Court and the markets regulator SEBI.

Adani has regained about $16.4 billion this year to become the 12th richest person in the world, as of February 8. However, as of today, Adani is estimated to be worth $99.1 billion according to Bloomberg’s Billionaire Index. On the other hand, the group’s flagship company, Adani Enterprises reported a 130% surge in profit last week, which prompted a rise in its share prices for the eighth consecutive day, per NDTV.

The business tycoon had reached a low of $37.7 billion, losing around $84 billion following the report. Even after his recovery, his net worth remains about $50 billion below its 2022 peak, when he briefly replaced Jeff Bezos as the world’s second richest person.

The Fall

In January 2023, American research firm, Hindenburg Research published a blistering report on Gautam Adani, who was then Asia’s richest man, for engaging in fraud over decades. The report accused the group of “brazen stock manipulation” and reporting false “sky-high” valuations of its firms. Further, the report highlighted that the Adani Group’s “substantial debt” put the group on a dangerous footing.

The Adani Group responded to the 400-page report with anger, calling the analysis “nothing but a lie” and condemned the report as an “attack” on India. It was later alleged that Hindenburg had admitted to shorting the group’s stocks through US-traded bonds and non-Indian traded derivative instruments to benefit from the fall of their stock prices.

However, it questioned the Adani Group’s aggressive debt-fuelled expansion into sectors ranging from airports to media. Thus, the companies owned by the group witnessed a meltdown in the stock market. At one point, over $100 billion was wiped off the value of its listed companies and Adani’s fortune dropped by over $80 billion within a month of the report’s release, as per CNN.

The Recovery 

A year after the Hindenburg report’s release, the Adani Group has recovered most of its lost valuation. “The group has done exceptionally well on various fronts since the Hindenburg report,” Manish Chowdhury, head of research at brokerage StoxBox told CNN. The analyst added that the group is now better managed and seems to have learned from its mistakes.

Shares of nearly all of Adani’s 10 listed firms have rallied this year, with some touching record highs. According to an exchange filing, the group’s net debt declined by 3.5% to $21.73 billion in the six months through September, last year, The Economic Times reported.

It has also attracted nearly $5 billion in investment from new foreign investors, including US private equity firm GQG Partners.

Further, the group has prepared a $2 billion of margin-linked financing, ( a loan where promoters use their existing shares as security) to insulate its portfolio from market volatility, the 61-year-old industrialist Adani wrote in an opinion in the Times of India newspaper, published on January 25, exactly one year after the Hindenburg report’s release.

Adani got another boost last month when the Indian Supreme Court upheld the clean chit given to the group by market regulator SEBI, stating that no further probes were needed.