India’s richest man Gautam Adani ended his trip to Davos earlier this month on an optimistic note, expressing confidence about India’s growth and ambition. However, less than a week later, everything changed. A scathing report from Hindenburg Research, a small American firm, accused the Adani Group of “brazen stock manipulation and accounting fraud scheme over the course of decades.” Adani immediately denounced the report as “baseless” and “malicious,” but the market reaction was swift and brutal, with his business empire losing $70 billion of its stock market value. Adani is a 60-year-old college dropout who has been compared to business magnates such as John D. Rockefeller and Cornelius Vanderbilt. His empire is built on fossil fuels, but he is also investing billions of dollars in clean energy. Critics say his rise has rested heavily on crony capitalism and question whether his empire could survive unscathed if there is a change of government. Hindenburg’s claims came at a sensitive time for Adani, as he sought to raise $2.5 billion by issuing new shares in Adani Enterprises. The offer was fully subscribed shortly before the deadline set for the close of trading in Mumbai on Tuesday. While Adani shares will see a much-needed correction in value, analysts believe that the group will survive this crisis.
Today: November 30, 2023