- Tuesday, March 04, 2025
By: Shubham Ghosh
At a time when many in the world of finance are spending sleepless nights over the bloodbath in Adani Group’s shares, veteran Indian economist Swaminathan Aiyar has opined that the Hindenburg report, which brought some serious charges against the Indian conglomerate in January which led to the mayhem, might be the “best thing” to have ever happened to Gautam Adani, the Indian billionaire who owns the conglomerate.
In a column published in The Economic Times, the 84-year-old Aiyar said the Adani Group will benefit by slowing the “breakneck speed” at which it was witnessing expansion and diversification and make its financiers more cautious in future.
The conglomerate has been rocked by a stock rout after US-based short seller Hindenburg Research brought out a report accusing it of stock manipulation and accounting fraud over the decades.
“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 wrote.
“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,” Aiyar said, adding that he did not own any Adani company shares because of “high prices and high risk”.
Seven listed Adani Group companies lost some $125 billion (£104 billion) in market value after the Hindenburg report came to the fore.
The group has 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,” Aiyar said.
He also disagreed with the opposition parties’ claim that Adani became famous by means of manipulation and political favours.
“I disagree. Going from humble origins to global No. 3 in two decades is impossible without exceptional business skills,” he wrote.
Adani was the richest man in Asia and among the top three richest in the world before the Hindenburg report controversy exploded, throwing him out of the top 20 richest globally.
Countering the accusation that India’s ruling Bharatiya Janata Party favoured the Gujarat-based Adani by granting him valuable assets, from ports and mines to airports and others.
He said the government initially gave the company the right to run a minor port in the Kutch desert in Gujarat without even a railway connection. He added that it was no less than a miracle to transform the desert patch into the country’s largest port.
“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 (£623.5 million) and Haifa Port $1.18 billion (£981.1 million). 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,” Aiyar said.
Aiyar backed Adani saying while businessmen cosy up to politicians but that doesn’t guarantee success. According to him, success in infrastructure needs skills and not just political allies.
The veteran economist even likened Adani to legendary Indian businessman Dhirubhai Ambani, who he said showed “immense talent” by “beating the old giants in their own game”.
