Rama Krishna Sangem
Gautam Adani, 61, a bad billionaire for many, had lost around 60.38 billion US dollars within a week after American short-seller Hindenburg research’s damning report alleged scores of malpractices in his group on January 27 this year. The short seller research group said Adani, over the years had inflated profits, boosted share prices and violated minimum public sharing holding norms (15 per cent).
Before Hindenburg report, Adani was world’s No 2, with around 124 billion US dollars, next only to Tesla’s CEO Elan Musk – at 224 billion dollars. After the report, Adani in a single day lost around 20 billion dollars, sharpest ever lost in the corporate world, and quickly slid to a rank of world’s No 21, within a week. Even in India, his ranking fell behind Reliance chairman Mukhesh Ambani. Since February, Adani regained 4.3 billion dollars.
Since then, his groups have initiated a series of measures to undo the damage and recover losses. The opposition parties have alleged his closeness to PM Modi and attributed his rise to crony capitalism – with political support. Even the Supreme Court has set up a committee of experts and asked SEBI (Securities and Exchange Board of India) to submit a report on the overlook of market regulators in case of Adani group activities.
Crisis converted to opportunity
However, Adani appears to have taken this as a challenge and initiated steps to convert this crisis into an opportunity. He sold shares worth of millions of dollars to public, thus complying with the norm of allowing minimum public share holding. Debt has been brought down to permissible levels, while giving importance to consolidating assets and profits. Many new ventures are either put on hold or deferred, while strengthening existing businesses.
This strategy helped him get inflows from some sovereign funds and private capitals. Of course, exit of his auditors – Deloitte is a blow to his credibility. But funds from the US investment fund – GQG Partners to a tune of over 1 billion dollars (Rs 8,710 crroe) for a share of 8.1 per cent in Adani Power is a plus point. GQG, an independent asset management firm has already invested close to 2 billion dollars (Rs 15,446 crore) in Adani group.
In a report form Bloomberg Billionaires on August 13, Adani ranks No 2 in India’s richest list with 64 billion dollars (minus of 56.6 billions), just below Mukhesh Ambani, No 1 richest man, with 96.4 billion dolllars (plus of 9.2 billions). The third richest is Shapoor Mistry and Family ranked India’s No 3, but with a distant 31.1 billion dollars (plus 3.3 billions).
Significantly, Adani crawled back to World top 20 richest list – at 20th position. Mukhesh Ambani, of course, is way ahead at world’s No 11. Adani’s story will look like a rags to riches. But, in India nothing moves – not even a sand bag – unless you have political backing. But, to be on the top globally, you must learn to do business with all fairness and transparency – Adani seems digesting this fact.
