ADANI'S THREE-PRONGED DEFENSIVE-OFFENSIVE STRATEGY

In theory, it is a simple plan. The mechanics are highly complex. Gautam Adani needs to ringfence his businesses, blunt ongoing investigations, and garner ammunition to fight his arch-enemy, Hindenburg Research, in the US courts.

- ALAM SRINIVAS

The add-on dynamics include raising or earning billions of dollars to pare down debt, tweaking the shareholdings in group companies, and hoping that the investigators focus on Hindenburg's actions that allegedly destroyed the wealth of the retail investors. This three-pronged strategy is in play and will gather pace over the next two to three months.

Many do not realise this blueprint was in place before Hindenburg's massive attack on January 24, 2023, which unleashed a scathing report against Adani Group. But after Adani stocks tumbled, the momentum gained urgency. What was earlier a deliberate, well-thought-out proposal to gain credibility among investors became a matter of life and death. If Adani cannot manage the three issues in the near future, he will go down in corporate history as a shooting star whose stock market blaze lasted for a few years.

Consider the issue of debt. Months before the Hindenburg report, Adani Enterprises, the group's flagship and umbrella company, planned to raise 20,000 crore through a follow-on public offering (FPO). A portion of this amount was meant to repay a part of the group's burgeoning debt. Despite being subscribed-with help from friends and loyalists-the FPO was cancelled, partly because of the bear hammering of Adani shares due to the Hindenburg effect. The valuation meltdown hastened the need to repay the loans to gain investor confidence and assuage the rage of the lenders.