The US government’s DFC thoroughly examined the allegations made by short-seller Hindenburg Research against Indian billionaire Gautam Adani before approving a loan of up to $553 million for his conglomerate’s container terminal project in Sri Lanka, according to a senior US official.
Despite the scathing report from Hindenburg Research, which had a significant impact on the Adani Group’s market value, the International Development Finance Corp. (DFC) conducted a comprehensive due diligence investigation stated that the agency found the allegations in Hindenburg’s report, labelling Adani’s actions as “the largest con in corporate history,” did not apply to Adani Ports & Special Economic Zone Ltd., the subsidiary leading the Sri Lankan project.
The Sri Lankan port deal, backed by the US government, is significant in countering Chinese influence in Asia amid President Xi Jinping’s Belt and Road Initiative.
Emphasizing the importance of distinguishing infrastructure projects from China’s approach, the official mentioned that the DFC would continue to monitor the Indian firm to prevent unintentional support for financial misconduct or inappropriate behaviour.
While the Adani Group has refuted the allegations, stating that regulatory inquiries and court hearings in India found no wrongdoing, the DFC’s investment is viewed by the conglomerate as international validation of its vision, capabilities, and governance.
Karan Adani, the tycoon’s son and CEO at Adani Ports, expressed confidence and reaffirmation from the international community during the announcement of the deal in Colombo.
And The Bull Run
Adani Group experienced a remarkable resurgence, with a two-day bull run propelling its market value beyond the Rs 12 lakh crore threshold.
The group’s shares achieved this milestone after a substantial 30% surge in just two sessions, marking a significant recovery from a previous decline earlier in the year triggered by allegations of financial misconduct and stock manipulation by Hindenburg Research.
Adani Enterprises, witnessing an 18% gain in two sessions, contributed to the overall rally – the stock temporarily halted trading on Tuesday after a 10% surge. The positive momentum was attributed, in part, to the victory of the Bharatiya Janata Party (BJP) in key state elections in Madhya Pradesh, Rajasthan, and Chhattisgarh.
Adani Enterprises reached an over 6-month high of Rs 2,784.30, Adani Ports touched a 52-week high of Rs 966.50, and Adani Green Energy emerged as the top gainer, surging nearly 19% to a 6-month high of Rs 1,341.6.
Other Adani group firms, including Adani Power, Adani Total Gas, Adani Energy Solutions, Adani Wilmar, ACC, and Ambuja Cements, also witnessed notable gains.
The day’s positive momentum resulted in a substantial increase of Rs 84,410 crore to the group’s combined market value, bringing the total market capitalization of group stocks to Rs 12.79 lakh crore.
According to brokerage Motilal Oswal, the state election results, considered a semi-final to the upcoming Lok Sabha elections in May ’24, provided reassurance to the markets regarding political stability.
The recent surge in Adani group stock prices began last week after the Supreme Court reserved its verdict on petitions seeking an examination of fraud allegations against the conglomerate.
And The Richest Award Goes To
Gautam Adani’s wealth has experienced a significant boost, making him the 16th richest individual globally with a fortune of $70.2 billion.
However, despite this impressive climb, his total net worth is still down by $50.3 billion compared to the January peak before the Hindenburg-related decline.
Adani is now the second-richest Indian on the Bloomberg Billionaires Index, trailing behind Mukesh Ambani, who holds the 13th spot with an estimated net worth of $90.4 billion, having seen an increase of over $3.33 billion in 2023.
The current market milestone represents a noteworthy recovery for the Adani Group, surpassing the Rs 12 lakh crore mark for the first time since the adverse impact of Hindenburg Research’s report earlier in the year.
The Last Bit, As the Adani Group’s market capitalization breaches the Rs 12 lakh crore milestone, it marks a symbolic victory for the conglomerate, showcasing its ability to weather challenges and regain investor confidence.
The positive momentum, triggered by a stellar 30% surge in two sessions and buoyed by the BJP’s triumph in key state elections, shows how intertwined the dynamics of financial markets and political developments are in this country.
The resurgence has not only propelled the group’s stocks to new highs but also elevated Gautam Adani to the 16th position among the world’s wealthiest individuals.