Adani Group comeback story: The monkey of Hindenburg is off the back of the Adani group. More than a month after the setback, the company is back in the news, albeit for positive reasons. 34 years after its foundation, its comeback story of Adani Group is the talk of the town.
Comeback story: Good news comes in packets for Adani Group
NSE and BSE have removed Adani Enterprises from short-term additional surveillance. The decision came after a month of three Adani Group companies being under the framework. The Exchange seems to have completed its due diligence on all 3 companies. APSEZ and Ambuja Cements, two others on the list, were removed from the framework on February 13.
The decision on Adani Enterprises came after more than a week of rallies in Adani stocks. All seven companies carrying the name Adani have registered significant spikes in the last few days. Comparing their respective prices from January 24 (the day the Hindenburg report was released) and March 7, 2023, Adani Ports Special Economic Zone and Adani Wilmar are leading the rally in percentage change.
Let’s talk about the comeback story with upticks came after a series of steps taken by Adani Group to regain investors’ confidence. The group announced that it will pay off Rs 5,000 crore worth of debt this year. Rs 1,500 crore has already been paid, while Rs 1,000 crore will be paid in March. has revised its public relations strategy and is paying off its debts. Adani Group used its cash balance and funds generated from business operations to pay it.
A group spokesperson said, “This part prepayment is from the existing cash balance and funds generated from the business operations. This underscores the confidence which the market has placed on the prudent capital and liquidity management plan for the group.”
Additionally, the group has also repaid Rs 9,250 crore of debt and is planning to pay $500 million of a bridge loan taken to finance the purchase of Holcim Ltd’s cement assets. To bring EBITDA down, the company is not buying Rs 7,000 crore worth of coal plants.
New PR strategy
While these developments can be termed as internal operations, Adani Group is making sure that these infos reach every investor. It is the lack of advertising and PR which caused investors to doubt the group in Hindenburg’s aftermath. Now, the Group has put money in its PR. It has hired Kekst CNC as a global communications advisor. Kekst has vast experience in image remaking. It is headquartered in two cities, Munich and Washington. Revival of We Work is a significant achievement in its kitty.
Kekset is training top brass for a situation room to deal with stressful situations. For legal formalities regarding Hindenburg, the group has hired expensive legal firms like Wachtell, Lipton, Rosen & Katz. Then there are roadshows in Singapore, Hong Kong, London, Dubai and several US cities to win back investors’ confidence.
The fact that Adani Group feels empowered to take such drastic steps is an indication of its strong fundamentals. The company was founded in 1988 and has grown by leaps and bounds in the last decade. It is not a fluke. The company has survived the licence raj, competitions in the wake of 1991 reforms and a shining India, the 2008 financial crisis, and many more minor hiccups. A company without strong fundamentals can’t do that.
Adani has business acumen and has experience getting through the system and getting the work done. The fact that it has seven listed companies in diverse categories is a testament to that. The group is active in domains like renewable power generation, solar manufacturing, power transmission, power and gas distribution, thermal power generation, extraction and utilisation of natural resources and infrastructure. Both sides of the political spectrum want to get Adani on board for investing. On a more nuanced and technical level, the business intelligentsia and civil society have also supported him throughout.
Sure, there are some anti-capitalists who will always rabble-rouse against any productive activity in the economy. They were shouting over the rooftops after the Hindenburg revelation. The fact still remains that Hindenburg chose to target Adani Group when it was in the transitory phase.
In this phase, companies take on huge debts to expand their business on the basis of contacts and reputations built in the preceding years, or decades in Adani’s case. For a few years, the company’s fundamentals were temporarily weak. As soon as investments come to fruition, these financial ratios quickly change.
That is the case with the Adani Group. Hindenburg Group understands it. But they just wanted to make money and were successful. The tide will change in a few months, and this time it will be tough to overturn on a global level against Adani.
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