Adani Group Chief Financial Officer Jugeshinder Singh expressed “amazement” at the findings in a statement and described it as a “malicious combination of selective falsehoods and outdated, unsubstantiated, and debunked charges.”
“The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming Follow-on Public Offering (FPO) from Adani Enterprises,” he said in a statement issued on Wednesday.
The Hindenburg Report, which was released on Tuesday, claimed that its analysis was based on a two-year research study. The report said that Hindenburg has inspected documents and spoken with numerous people in the process, including former Adani Group executives.
The Securities and Exchange Board of India (SEBI), which oversees India’s capital markets, did not immediately respond. Shares of Adani Ports and Special Economic Zone dropped 7.3% to their lowest point since early July following the release of the Hindenburg report. Adani Enterprises experienced a 3.7% decline to close to a three-month low. Cement businesses controlled by Adani, ACC and Ambuja Cements, which it purchased from Holcim of Switzerland last year for $10.5 billion, slumped 7.2% and 9.7%, respectively, on Wednesday.
According to Hindenburg’s research, five out of seven significant listed Adani companies had current ratios below 1, which is a measurement of liquid assets minus short-term liabilities. The Adani Group, however, has consistently denied having excess debt. At a press conference in Ahmedabad in connection with the Group’s FPO (which opens on Friday), Singh had said that many of the Group companies have zero debt.
“Our companies have credit ratings that are on par with the Government of India. We are deleveraging fast since our companies generate enough cash. Adani Wilmar is debt free. Only Adani Airports has a debt-equity ratio of 4.5, but that will soon come down to three,” he said.
Hindenburg, known for having shorted electric truck maker Nikola Corp (NKLA.O) and Twitter, said it holds short positions in Adani companies through U.S.-traded bonds and non-Indian-traded derivative instruments. Its research report questioned how the Adani Group has used offshore entities in offshore tax havens like Mauritius and the Caribbean Islands.