NEW DELHI, Jan 30 (Reuters) – India’s Gautam Adhani, a school dropout and billionaire who has become Asia’s richest man, faces a major challenge as his company’s shares plunged after he questioned the business practices of a U.S. short seller. .
Hailing from Gujarat in western India, Adani built his empire from scratch after starting out as a commodity trader. India’s Prime Minister Narendra Modi hails from the same state, and their relationship has long been scrutinized by Modi’s opponents.
His interests expanded into ports, power generation, airports, mining, edible oils, renewable energy, media and cement, and according to Forbes he became the third richest person in the world, with a net worth of $127 billion, trailing only Bernard Arnold. And Elon Musk.
Married to dentist Priti Adhani, he has two sons, Karan and Jeet, both of whom are involved in corporate businesses.
Despite his wealth, the 60-year-old, who hails from a middle-class textile family, is far less well-known than other billionaires in a country where many inherit their wealth.
His business style has been described as “very hands-on,” according to a person with direct knowledge of his dealings.
As Adani’s empire has grown, shares of his seven listed companies have soared — in some cases more than 1,500% in the past three years amid aggressive expansion. He denied allegations by Modi’s opponents that he benefited from his close ties.
In a 2014 interview with Reuters, when asked if he was friends with Modi, Adani said he had friends across the political spectrum but avoided politics.
Adani said there were no political leaders behind his victory and when asked about Modi’s use of Adani planes during the interview, the politician was “fully paying”.
In recent years, the $220 billion Adani Group empire has attracted foreign investment – France’s TotalEnergies (TTEF.PA)For example, it partnered with Adani last year to build the world’s largest green hydrogen ecosystem.
More recently, Adani has taken a proactive approach to his public image, giving interviews to local and foreign media.
Appearing this month on a popular Hindi TV show called ‘People’s Court’, Adani sat in a mock witness box inside a courtroom setting and answered questions about his ensemble – providing an unusual level of scrutiny.
He described himself as “a shy person” and credited his rise in popularity in part to the political attacks he faced.
The Modi government has denied the allegations of favoring Adani.
People got to know Adani (who Adani is) because of Rahul ji’s continuous targeting during and after the 2014 elections,” Adani said during the event, referring to Leader of Opposition Rahul Gandhi.
Shares of his group’s listed companies fell last week with cumulative losses of $48 billion, after short-seller Hindenburg Research accused Adani’s businesses of improperly using offshore tax havens, flagging concerns about over-indebtedness.
The Adani Group issued a detailed response on Sunday, saying it complied with all local laws and made required regulatory disclosures. The group said the Hindenburg report was intended to help book gains without citing US-based short-seller sources, which had earlier said it was baseless.
‘Growth with Good’
Adani Group’s website says its mission is to balance “growth with benefit” as it aims to create assets of national relevance and transform lives through self-sufficiency and sustainability.
Adani is no stranger to controversy. Fishermen have been protesting for months against the construction of a $900 million port in southern India’s Kerala, in which he sued the state government and fishermen leaders. In Australia, environmentalists have protested for years against Adani’s Carmichael coal mine project in Queensland over concerns about carbon emissions and damage to the Great Barrier Reef.
His latest challenge is how to deal with an unprecedented share price slump in the group’s flagship Adani Enterprises. (ADEL.NS) It launched the nation’s largest public secondary stock offering this week, aiming to raise $2.5 billion.
The share price fell well below the offer price on Friday, casting doubt on its success.
The Hindenburg report – and its fallout – may bring reputational damage but the Adani Group’s financial strength and assets can reassure investors that steps can be taken to mitigate that damage, film guru Dilip Cherian told Reuters.
“It’s a risk given the rise to stardom he’s had,” Cherian said.
Adani told India Today TV in December that people were raising questions about the group’s debt, without saying who he was referring to, and not diving deep into its finances.
Adani was seen heading to a meeting at the Union Power Minister’s office in New Delhi as the stock market tumbled in Mumbai. It is not known what was discussed and the Adani group did not respond to a request for comment on Friday.
Jefferies says Adani Group’s consolidated total debt is $23.34 billion. While Hindenburg said the main listed Adani companies have “substantial debt”, it has put the group as a whole in a “secure financial position”, with the Adani Group managing its debts and no investors raising any concerns.
Reporting by Shivam Patel, Aditi Shah and Aditya Kalra in New Delhi; Additional reporting by Nikunj Ohri in New Delhi and Chris Thomas in Bangalore; Editing by Elaine Hardcastle and Alexander Smith
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