Gautam Adani’s flagship
firm has called off its $2.5 billion share sale in a dramatic
reversal as a rout sparked by a US short-seller’s
criticisms wiped billions more off the value of the Indian
“Today the market has been unprecedented, and our stock
price has fluctuated over the course of the day. Given these
extraordinary circumstances, the Company’s board felt that going
ahead with the issue will not be morally correct,” Adani said on Wednesday.
“Our balance sheet is very healthy with strong cashflows and
secure assets, and we have an impeccable track record of
servicing our debt. This decision will not have any impact on
our existing operations and future plans,” the billionaire added
in a statement to Indian exchanges.
“Once the market stabilises, we will review our capital market strategy.”
A report by Hindenburg Research last week alleged improper
use of offshore tax havens and stock manipulation by the
It also raised concerns about high debt and the
valuations of seven listed Adani companies.
The January 24 report has since triggered an $86 billion erosion
in the market capitalisation of seven listed Adani Group companies.
Adani Group denies the allegations.
Until last week, Adani was the world’s third-richest person, according to Forbes, with a net worth of $127 billion, trailing only Bernard Arnault and Elon Musk.
On Wednesday he had slipped to No. 15.
Adani Group has said Hindenburg’s report was a “calculated attack” on India and its institutions. A senior executive compared the rout of its stocks with a colonial-era massacre saying investors were behaving like the Indian soldiers who fired on fellow-citizens under orders from British rulers.
Critics say Adani’s close relationship with Prime Minister Narendra Modi has helped him win business and avoid proper regulatory oversight.
Modi, who like Adani is from Gujarat state, has not commented publicly since the Hindenburg claims, which analysts say has hurt India’s image just as it seeks to woo overseas investors away from China.
The firm’s many interests include ports — the firm took control of one of Israel’s biggest this week — telecoms, airports, media and energy, both in coal and renewables.
India’s opposition Congress party called this week for a “serious investigation” by the central bank and regulator into Adani’s firms following the Hindenburg allegations.
“For all its posturing about black money, has the Modi government chosen to turn a blind eye towards illicit activities by its favourite business group?” Congress said.
Opposition lawmakers mockingly chanted “Adani! Adani” on Wednesday as Finance Minister Nirmala Sitharaman talked about ports during a budget speech.