January 3, 2024

New Delhi, India

Supreme Court to Decide on Adani Group Fraud Allegations

In a significant development, the Supreme Court is poised to announce its judgment on January 3 in a series of petitions seeking an inquiry into allegations of fraud levelled against the Adani Group. The accusations stem from a Hindenburg Research report in January 2023, resulting in a substantial decline of nearly $60 billion in Gautam Adani’s personal wealth.

Judicial Involvement and Investigation:

Back in March 2023, the Supreme Court directed the Securities and Exchange Board of India (SEBI) to investigate potential violations of securities law by the Adani Group in response to the Hindenburg report. A dedicated expert committee, led by former top court judge Justice AM Sapre, was appointed to aid in the investigation.

Current Proceedings and Delays:

Recent pleas were filed against SEBI for the perceived delay in completing the investigation, with applicants seeking contempt proceedings due to non-compliance with the court’s established timeline. The awaited Supreme Court verdict will shed light on these petitions and the broader examination of fraud allegations against the Adani Group.

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Adani Group’s Response and Financial Actions:

Throughout the controversy, the Adani Group has consistently refuted the allegations outlined in the Hindenburg report. In a proactive move, the conglomerate raised substantial funds in 2023, securing over ₹41,500 crore through a combination of equity and debt.

Future Plans and Market Impact:

Undeterred by the legal challenges, the Adani Group is planning an ambitious ₹7 lakh crore capital expenditure over the next decade for the expansion of its infrastructure business. This strategic move was highlighted in a recent investor presentation, signaling the conglomerate’s commitment to its growth trajectory.

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Market Performance and Wealth Rebound:

Despite the initial setback, the surge in Adani Group stocks contributed to a remarkable recovery in Chairman Gautam Adani’s wealth, reaching $84.3 billion, according to the Bloomberg Billionaires Index.

Funding Strategy and Sector Focus:

Looking ahead, the Adani Group aims to utilize bond markets for funding, with approximately 80% of the funding sourced from global debt issuances and the remaining from domestic channels. The conglomerate, comprising six companies spanning power, ports, and airports, is positioning itself for sustained growth in various sectors.

As the Supreme Court prepares to deliver its verdict, the outcome will have far-reaching implications for the Adani Group and may influence the ongoing investigation into the allegations of fraud. Despite the challenges, the conglomerate’s strategic financial moves and ambitious plans underscore its determination to forge ahead.

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