Hindenburg allowed us to refocus on our core businesses: Karan Adani

He also mentioned that the Group has understood the importance of "perception and brand" value after the Hindenburg affair

The allegations from Hindenburg Research and their impact on Adani Group are now considered “way back in the past”, Adani Ports and Special Economic Zone Managing Director Karan Adani said in an interview with Business Standard.

He emphasised that the entire situation provided an opportunity for the group to redirect its focus towards its core businesses. Adani acknowledged the significance of “perception and brand” value in the aftermath of the Hindenburg affair.

In January 2023, the US investment research firm accused Adani Group of “stock manipulation and accounting fraud”, along with improper use of offshore tax havens and concerns over high debt. Despite the initial stock plummet, Adani Group stocks later recovered.

Adani discussed the learnings from this, observing, “It allowed us to refocus and concentrate more on the business. We looked at some of the decisions that we were postponing to examine what we needed to do as a group.”

As a result, the group divested its non-core business, Adani Capital, a non-banking financial company (NBFC). Reflecting on this, he remarked, “We had an NBFC business, Adani Capital, which was not fitting into the core of the business. So, we divested that business. So things like that: which business is core, which business is not core, where the group is headed, where the growth opportunity is, and where we want to focus on. I think this allowed us the opportunity to do that.”

The son of Gautam Adani spoke to Business Standard after Prime Minister Narendra Modi inaugurated the new terminal at Lucknow airport on Sunday.

Adani Group manages airports in seven cities, including Lucknow, with six airports leased from the Indian government in 2019 through competitive bidding for a lease period of 50 years.

When asked about the government’s plan to lease out 13 more airports, Adani expressed the group’s intention to participate, saying, “Yes. As and when the request for a proposal comes out, we will participate in it.”

Regarding the government-run Airports Authority of India (AAI) holding a 26 per cent stake in Mumbai International Airport (MIAL), Adani expressed interest in purchasing the government’s stake if it becomes available. However, he clarified that Adani Group is not interested in acquiring AAI’s stake in other airports like Delhi, Hyderabad, and Bengaluru, as it would only result in a minority stake without control.

Adani highlighted the current financial year as one of the best for Adani Group, with earnings before interest, tax, depreciation, and amortisation (Ebitda) growing by almost 40 per cent, and the net debt-to-Ebitda ratio coming down to almost 2.5.

“We have 27 (commercial) papers that are rated by seven agencies, and none of them were downgraded or put on a watch list. This shows how strong the business fundamentally is,” he said, adding that “Hindenburg was way back in the past”.

Adani stressed the strength of the group’s fundamentals and how it has been able to raise equity during the past months. He said, “Our fundamentals remain strong. Because if our fundamentals are not strong, nobody can withstand such an attack. We have been very clear that there was no wrongdoing. Most importantly, whatever was raised (by Hindenburg) was already disclosed by us a long time back. In all our prospectus, if you see, it was already disclosed. So, it was not something new.”

Discussing the future of airports in cities like Ahmedabad and Lucknow, Adani predicted a shift in their roles. He said, “Today, for direct international travel, people either go to Delhi or Mumbai or they go to West Asia. What we will eventually see is that these airports (such as Lucknow and Ahmedabad) will connect directly to international destinations in Europe, North America, etc.”

Adani highlighted that airports in cities like Lucknow and Ahmedabad primarily provide connectivity to metro cities such as Delhi and Mumbai. However, he expected a change in the coming years, with Tier-III cities establishing more direct flights with Lucknow and Ahmedabad, bypassing the hubs.