Addressing students at Mumbai’s Jai Hind College in September this year, Gautam Adani summed up his life’s philosophy. Resilience, he said, is “not about avoiding the falls. It’s about rising stronger after every fall”. Not even his worst detractors can accuse him of at least not trying to walk his talk.
The Adani Group chairman is, thus, far from being battle-weary even though he has been forced to navigate two existential crises in as many years of his three-decade-long entrepreneurial journey. Consider this: Barely a month after being at the centre of charges of bribery and misrepresentation of facts by the District Court of New York and the US Securities and Exchange Commission, Adani was seen seated virtually next to Prime Minister Narendra Modi at the Rajasthan Investment Summit. There was no sign of a slowing down and his growth plans haven’t seen the slightest pruning. In fact, the projects promised at the event were the biggest of those outlined by other industrialists.
The comeback is truly remarkable. The charges, this time around, are far more serious coming as they do from US legal authorities. Experts say the case against the industrialist appears to be backed by documents, but Adani is not one to be cowed down. He remains unfazed, vehemently denying the allegations and going about his business as usual.
After some initial reactions, the stock markets too have taken things in their stride. However, access to the dollar bond markets could be difficult; the group said it would hold back any dollar bonds for some time until legal formalities are complete.
The same never-say-die spirit was seen in January 2023 when US short-seller Hindenburg Research alleged that a web of Adani-family controlled offshore shell entities in tax havens — from the Caribbean, Mauritius and the United Arab Emirates — were allegedly being used to facilitate corruption, money laundering and taxpayer theft, while siphoning money from the group’s listed companies. The report resulted in nearly $120 billion of market capitalisation — of group companies — being wiped out. Bonds issued by group companies lost value.
Adani played the nationalist card responding to the attack on its business as though it was an assault on India; the group’s chief financial officer was seen standing before the Indian flag when he spoke on television. And although the group was compelled to withdraw an equity offering of $2.5 billion (Rs 20,000 crore), it has been able to mop up equity capital. Indeed, there is much to be said for his ability to deal with serious allegations. A probe by the Securities and Exchange Board of India (Sebi) has yielded little and the role played by Adani’s elder brother Vinod Adani, in the group’s transactions, remains unclear. To be sure, Adani deserves the benefit of the doubt, since nothing has been conclusively proved. But, few businessmen would have been able to recover from such episodes, unscathed, in the manner that he has.
He continues to acquire businesses and has managed to get back shares pledged to get loans. The group’s overall debt, which fell from Rs 2.41 lakh crore in March 2023 to Rs 2.38 lakh crore in September 2023, has risen to Rs 2.79 lakh crore. But, in the meanwhile, the net debt to ebitda for the group has fallen sharply with assets having become operational and the profitability improving. Moreover, at the end of September, the group had cash of about Rs 39,000 crore. Crisil Ratings certified the group has sufficient liquidity and operational cash flow for debt obligations and capital expenditure over the medium term.
His personal wealth may have taken a bit of a knocking — it has dropped to about $82 billion from the peak of $122.3 billion. But, otherwise, life goes on as usual.