Hindenburg may be Best Thing That Happened to Adani: Economist

New Delhi: The Hindenburg report may be the “best thing” that ever happened to billionaire Gautam Adani, as it could bring financial discipline to the conglomerate, economist Swaminathan S Anklesaria Aiyar has said. In a column published in The Economic Times, Mr Aiyar argues that the Adani Group, pummeled by a stock rout after US shortseller Hindenburg Research’s report, will benefit by slowing the “breakneck speed” at which it has been expanding and diversifying. “I think the Hindenburg report may be the best thing that ever happened to Adani. It will slow his speed of expansion and diversification and force his financiers to be diligent and cautious in future. This could impose highly desirable financial discipline on Adani, to his own benefit,” he writes. “Hindenburg may have been a blessing in disguise – or, in Winston Churchill’s words in response to his wife trying to cheer him up after his post-war electoral defeat, a blessing ‘quite effectively disguised’.” “One day I might actually buy Adani shares,” he says, adding that he did not own any Adani company shares because of “high prices and high risk”. Seven listed companies of the Adani Group have lost some $125 billion in market value after the Hindenburg report alleged improper use of tax havens and stock manipulation by the applesto-airports conglomerate. The Adani Group has firmly denied any wrongdoing. “Adani has been diversifying and expanding at breakneck speed using borrowed money, bidding very high prices in auctions and acquisitions. This facilitates fast expansion, but carries great risks,” Mr Aiyar points out. The economist discards criticism, often voiced by opposition parties, that Mr Adani shot to riches by manipulation and political favours, “minting money in cosy monopolies”. “I disagree. Going from humble origins to global No. 3 in two decades is impossible without exceptional business skills,” he writes. He also discounts critics’ accusation that the ruling BJP “gave” the Gujarat-based businessman valuable assets, from ports and mines to airports and transmission lines. “No. What the government initially gave Adani was the right to operate a minor port in the Kutch desert without even a rail connection. To convert this desert patch into India’s largest port is close to miraculous,” he says, recalling his visit to the Mundhra port, which, he felt, “seemed to be on another planet”. “So, the government is backing him to acquire strategic jetties and ports in Sri Lanka and Israel. Critics call this a favour. Really? The Sri Lanka terminal will cost $750 million and Haifa Port $1.18 billion. No Indian rival would dare risk so much even if offered on a platter. Adani’s skills have made him a strategic player, more than just a businessman,” Mr Aiyar asserts. All businessmen cosy up to politicians, but it cannot guarantee success, the economist says, adding that success in infrastructure requires skill, not just political friends. He likens Mr Adani to Dhirubhai Ambani, who, he says, showed “immense talent” by “beating the old giants at their own game”. “Those who focus only on his manipulation are blind to the phenomenal skills that made him a historical titan, warts and all. Adani is treading a similar path,” he says.

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