Embattled Indian Business Empire Raises $2.5 Billion in Tricky Share Offering

Adani Enterprises, the flagship company in the Indian billionaire Gautan Adani’s business empire, raised $2.5 billion from investors on Tuesday in a nail-biting process that had been thrust into doubt by recent allegations of fraud.

The conclusion of the share offering was supposed to mark another milestone in the ever-upward ascent of the Adani Group. Instead, a week ago, Hindenburg Research, a New York investment firm betting Adani Group’s stock price would tumble, dropped a bomb of a report on the conglomerate, calling its finances “the largest con in corporate history.”

The Adani Group has dismissed Hindenburg’s report, in part framing it as an attack on India itself.

In each market trading session since the report’s publication, shares of most of the public companies controlled by Mr. Adani have sunk, sometimes triggering a 20 percent daily limit. Tens of billions of dollars in value has been wiped out, including during the days when the company was soliciting bids for its offering, the largest of its kind in India.

The Hindenburg report was aimed squarely at the valuations of Adani Group’s companies, which had reached jaw-dropping heights. At the start of this year, the share price for Adani Enterprises had risen 3,000 percent over five years.

Hindenburg is what’s known as a short seller, which makes money via investments that pay off when a company’s share price falls. It argued that the share prices of the Adani Group’s companies were artificially inflated by manipulations involving offshore shell companies.

Over the weekend, the Adani Group published a lengthy rebuttal to what it called Hindenburg’s “baseless and discredited allegations to drive an ulterior motive.” In a response running to more than 400 pages, the company said Hindenburg’s report was “not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.”

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