Notes

2. • Founded – 20 July 1988
• Founder – Gautam Adani
• Headquarters - Ahmedabad, Gujarat, India
• Services - Port Management, Electric Power, Mining
Renewable energy, Airport Operations, Oil and Gas, Food
Processing, Infrastructure
• Marketing capitalization (Rs. Cr) – 246724
• Authorized Capital (Rs. Cr) - 485.92
• Issued Capital (Rs. Cr)- 109.98
• Founded – 2017
• Founder – Nathan Anderson
• Headquarters – New York City
Hindenburg Research is a financial research firm that conducts
investigative reports on companies, aiming to uncover information not
publicly known and to benefit from a decline in the target company's stock
price by taking a short position after the report is circulated to limited
partners.

3. Allegation
A research company and short seller, Hindenburg, recently released a report accusing Adani of corporate
fraud and stock market manipulation. Hindenburg is known for betting against stocks and releasing
detailed reports outlining their reasoning, hoping others will join and further beat down the stock price.
Adani argues that Hindenburg's motives are questionable and that their research is flawed and fails to
make substantive allegations against the company. Adani also believes this to be an attack on the Indian
growth story by "vested interests". They released their own rebuttal answering Hindenburg's questions.

4. Allegation: 1
“Adani's associates have faced
legal issues, including a diamond
trading scam implicated by the
DRI involving Adani's brother-in-
law, Samir Vora.”
“Adani refutes claims of legal
issues with associates, stating that
they were dismissed by higher
authorities and courts in India.”
Hindenburg Research:- Adani:-

5. “Hindenburg alleges that entities connected to Vinod
Adani dealt with Adani companies without disclosing
transactions, potentially violating the legal requirement
for listed companies to disclose related-party
transactions. Hindenburg also claims that Vinod used
offshore entities and shell companies to inflate the
financial health of publicly listed Adani companies and
perpetrate corporate fraud.”
Adani argues that Vinod Adani is not a related
party and holds no managerial position in Adani
entities, so the allegations against him are not
relevant, and any related party transactions
have been properly disclosed in compliance
with Indian laws.
Allegation: 2
Hindenburg Research:- Adani:-

6. “Adani group companies lent $87
million to AdiCorp, which
immediately transferred 98% of
the loan to Adani Power, raising
suspicion of AdiCorp being used
as a conduit for funneling funds.”
“Adani claims AdiCorp is not a
related party, thus not obligated
to disclose details to shareholders,
but doesn't explain why they
extended the loan to AdiCorp.”
Allegation: 3
Hindenburg Research:- Adani:-

7. “Hindenburg lists multiple "suspect"
transactions and requests clarity,
including loans of $200 million and
$600 million made by entities
associated with the Adani group to
Adani Infra, suggesting potential
movement of funds between group
companies.”
“Adani's response asserts that the
transactions are not related party
transactions, declining to offer
clarification on the source of funds.”
Allegation: 4
Hindenburg Research:- Adani:-

8. “Hindenburg alleges that Adani Group
moved money in and out of listed
companies, eroding shareholder wealth,
citing a payment of $783 million made
by listed Adani companies to the private
contractor PMC over 12 years, which
they claim was a dummy firm for the
Adani Group.”
“Adani cites an order by higher
authorities declaring the two firms
as independent entities and
dismisses Hindenburg's claim.”
Allegation: 5
Hindenburg Research:- Adani:-

9. “Hindenburg believes Adani's complex
corporate structure is deliberate and used to
hide shady dealings, citing the company's 578
subsidiaries, frequent CFO exits, and small
auditing entity, Shah Dhandharia, as red flags.”
“Adani refutes the allegations, claiming that
infrastructure companies are complex by
nature, new projects require separate
companies, frequent CFO exits were for bigger
roles in Adani group, and that their accountants
are capable with big 4 auditing Adani entities.”
Allegation: 6
Hindenburg Research:- Adani:-

10. “Hindenburg argues that funds based in
Mauritius have invested nearly $8 billion in
Adani group companies, with Elara India
Opportunities Fund investing close to $3 billion
and having a director with ties to Adani family,
raising questions about the connection between
these funds and Adani Group.”
“Adani dismisses the claims about
connections between the Mauritius
funds and the Adani group as incorrect,
stating that they are independent
shareholders and that they have no
information about public shareholders.”
Allegation: 7
Hindenburg Research:- Adani:-

11. “Hindenburg claims Adani has
taken legal action against critics
despite claiming to welcome
criticism, leading to questions
about their true stance towards
differing opinions.”
Adani states that they are using
legal channels to defend
themselves and their businesses,
while still being open to
introspection and understanding
others' points of view.
Allegation: 8
Hindenburg Research:- Adani:-

12. No. of MThs Year Ending 12 Mar-21* 12 Mar-22*
Current Ratio x 0.9 0.7
Interest Coverage x 1.8 1.4
Debt to Equity Ratio x 0.6 0.9
Return on Assets % 4.1 3.0
Return on Equity % 4.3 2.1
Return on Capital Employed % 9.2 8.1
Ratio Analysis for ADANI ENTERPRISES