Gautam Adani dismisses share-price rout as ‘temporary’ volatility

Indian tycoon Gautam Adani has dismissed a share-price rout triggered by a short-seller assault on his conglomerate as “temporary” volatility.

At the quarterly earnings release of his Adani Enterprises on Tuesday, the ports-to-power mogul said his conglomerate’s biggest division “will continue to work with the twin objectives of moderate leverage and looking at strategic opportunities to expand and grow”.

Adani’s comments came hours after home affairs minister Amit Shah said India’s ruling Bharatiya Janata party had “nothing to hide” over US short seller Hindenburg Research’s assault on the billionaire. Adani, widely regarded as a close ally of Prime Minister Narendra Modi, has painted the threat to his conglomerate as a “calculated attack on India”.

Opposition politicians have used the longstanding relationship between Modi and fellow Gujarat native Adani to needle the prime minister, who has not directly addressed the issue.

Adani Enterprises shares climbed as high as Rs1,889 on Tuesday, a 9 per cent rise on the opening price of Rs1,735 and up from a low of Rs1,017 on February 3, according to National Stock Exchange of India data.

Despite the recovery, the stock is still down about 45 per cent since Hindenburg published a report last month alleging stock manipulation and fraud. The Adani Group has denied the allegations but Adani Enterprises had to cancel a $2.4bn share sale that was intended to broaden its investor base.

India’s securities regulator told the Supreme Court on Monday that it was investigating allegations made in the Hindenburg report and share trading before and after its publication, Reuters reported.

Adani Enterprises said it had made “no material financial adjustment” to its quarterly results, which refer to a period before the Hindenburg report was released.

The Adani Group’s biggest unit by market capitalisation, Enterprises reported profit after tax of Rs8.2bn ($99mn) for the three months to the end of December, having posted a Rs120mn loss for the same period the previous year.

Adani Enterprises’ management said earnings had been boosted by increased profits at units including its coal-trading division, a 40 per cent year-on-year jump in passenger numbers at its airports, as well as rising solar panel manufacturing capacity.

Quarterly revenues climbed 42 per cent year on year to Rs270bn.