All the ingredients for a financial scandal with political ramifications seemed to be there. The Adani group, one of the largest in the country, which remained largely unknown to the general public outside the borders of India, was thrust into the spotlight in January. A report from Hindenburg Research has plunged this conglomerate into a storm, also threatening to splash political circles, as its boss Gautam Adani is close to the Indian Prime Minister, Narendra Modi.
The American investment research firm and short seller (which bets on the decline on the markets) accused the Indian tycoon of being the author of the “biggest scam in business history” and to have made his empire – whose activities range from port infrastructure to energy to cooking oil – prosper thanks to fraud. On the markets, these revelations initially caused a real debacle. The Adani group’s stock market value fell by around $150 billion (€138 billion). Since then, his actions have regained color, as if nothing had happened.
“Nothing, not even Hindenburg Research, seems to be stopping the advance of big Indian companiesnotes CP Chandrasekhar, of the Political Economy Research Institute at the University of Massachusetts in Amherst. The Adani group continues its acquisitions, albeit at a less frenetic pace, and has managed to convince the financial markets to lend it more money, despite assessments which judge it to be too indebted. » In August, in order to take control of Sanghi Industries, a smaller rival cement manufacturer, the Adani group, via Ambuja Cements, invested more than $200 million, its first major acquisition since the Hindenburg accusations. Then, in September, TotalEnergies announced it would spend $300 million to form a joint company with Adani Green Energy.
Although it has experienced the most meteoric rise in recent decades, the Adani group is no less emblematic of the Indian model of conglomerates. Other giants developed according to a similar scenario and continue their trajectory today. Reliance Industries of tycoon Mukesh Ambani, the richest man in the country, the essential Tata and the Birla empire also seem to be doing wonderfully. According to a study by Marcellus, a fund manager based in Bombay, the twenty largest Indian groups alone make around 80% of the profits generated by companies on the subcontinent. A figure that has doubled over the last ten years.
You have 80% of this article left to read. The rest is reserved for subscribers.