When others would have gone under, our liquidity became greatest asset: Gautam Adani on Hindenburg attack

Gautam Adani in his speech said that despite never having faced any challenges with debt repayments, they chose to drop our Debt to EBITDA ratio to 2.5x in just six months.
Adani Group chairman Gautam Adani
Adani Group chairman Gautam AdaniFile Photo | AFP

Gautam Adani, chairman of Adani Group, said that liquidity became their greatest asset following the setback the port-to-power conglomerate faced after a short-seller published a stinging report on them in January 2023.

"Typical short sellers target gains from financial markets. This was different. It was a two-sided attack – a vague criticism of our financial standing and, at the same time, an information distortion campaign, dragging us into a political battlefield. The attack was a calculated strike two days before the closing of our Follow-on Public Offer. Amplified by a segment of vested media, it was designed to defame us, do maximum damage and erode our hard-earned market value," said Gautam Adani in his address to shareholders at the AGM of Adani Enterprises Ltd.

"Given the noise, despite successfully raising Rs 20,000 crore through India’s largest-ever FPO, we made the extraordinary decision to return the proceeds. This underscored our dedication to our investors and our commitment to ethical business practices. In this situation, where most companies would have gone under, our liquidity became our greatest asset."

"To further augment our cash reserves, we raised an additional Rs 40,000 crore, comfortably covering the next two years of our debt repayment. This decisive action is a testimony to the great strength of your company. It restored market confidence – and we safeguarded our portfolio against any volatility by pre-paying Rs 17,500 crore in margin-linked financing," added Adani. 

Adani Group faced a big setback in 2023 when US-based short seller Hindenburg Research in a report published on January 24 accused the port-to-power conglomerate of stock market manipulation, called the share prices of its listed companies ‘overvalued’, questioned the role of close family members among other serious allegations. 

The report caused a stock rout in the 10 listed Adani stocks and at its peak wiped out more than USD 120 billion from the combined market capitalisation. The aftermath of the report was the formation of a Supreme Court appointment committee which so far finds no wrongdoing by Adani. 

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Gautam Adani in his speech said that despite never having faced any challenges with debt repayments, they chose to drop our Debt to EBITDA ratio to 2.5x in just six months. "It now stands even lower at 2.2x. This approach has not only strengthened our financial resilience but has also increased our headroom for future expansion."

"Our stand against the attack was further vindicated when the Supreme Court of India affirmed our actions. In addition, our commitment to operational excellence and transparent disclosures was validated not only by rating agencies and the well-informed financial community, but also by respected global investors like GQG Partners, TotalEnergies, IHC, QIA and the US Development Finance Corporation – all of whom chose to invest in us…The headwinds that tested us became the very ones that made us even stronger," he added. 

Gautam Adani also highlighted his commitment to renewables and said that they are on track to develop 30 GW capacity in the next five years. "I would like you to picture Khavda, set in one of the world’s toughest deserts and now home to the world’s largest Renewable Energy installation spanning several hundred square kilometres. Already generating 3,000 MW of clean energy, our aggressive timeline aims to develop 30 GW capacity in the next five years."

Adani also highlighted the Group’s financial and said that they achieved an unprecedented milestone in 2023-24. 

"We recorded our highest EBITDA of Rs 82,917 crore – or approximately USD 10 billion – a remarkable surge of 45%. This exceptional performance drove our PAT to a record high of Rs 40,129 crore, marking a substantial 71% growth. And all of this resulted in an all-time-high level of liquidity for the Group with a cash balance of Rs 59,791 crore," he said. 

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