Analysis of Adani Stocks for investment and personal preference.

1. Investment
in Adani
Safe or Unsafe?
Anindya Singh
PGP Rise
2023-24

2. Table of contents
A
03
01
04
02
B
Introduction
Company Management Auditing
Background Stock Manipulation People in the Company
Analysis & Opinion

3. A. Background
The Adani Group is an Indian multinational conglomerate
with interests in various industries including energy,
resources, logistics, agribusiness, real estate, financial
services, and defense.
Hindenburg Research is a Financial research firm founded
by Nathan Anderson in 2017, that finds man made issues
and use Short-Selling to make profits.
The Hindenburg Research report made a series of
allegations against the Adani Group which impacted the
company’s stability in the stock market.

4. Stock
Manipulation
01
VS

5. Stock Manipulation Allegations
Shell Companies High Debt
Hindenburg Research claimed
that Adani operates a
network of shell companies.
Shell companies are entities
that are primarily used for
illegitimate purposes, such as
money laundering or tax
evasion. Hindenburg alleges
that these shell companies
are used to inflate Adani's
stock prices and
misrepresent its financial
health.
Hindenburg has raised
concerns about Adani's high
levels of debt. They claim that
Adani's debt-to-equity ratio
is alarmingly high, indicating
potential financial instability
and increased risk for
investors.
Hindenburg has accused
Adani of having a low current
ratio. The current ratio is a
measure of a company's
ability to cover its short-term
obligations with its
short-term assets. A low
current ratio suggests that a
company may struggle to
meet its immediate financial
obligations, raising concerns
about its financial health.
Current Ratio

6. Shell Companies
Pic 1: Shows the round tripping of cash as per the Hindenburg
report between the foreign entities.
Pic 2: The table shows that the foreign entities which holds
the majority stakes are subsidiaries of a single company
Monterosa Holdings.
Adani’s Response:
Pic 1
Pic 2

7. High Debt
Adani Response: The growth of EBITDA was 2x the debt and
the net debt to profit ratio is decreasing over time. (Chart A)
Total Net Debt to RR-EBITDA is slightly higher than Moderate Risk Category due to
the huge group companies to balance it out.

8. Current Ratio
The current ratio compares all of a company's current assets
to its current liabilities. | (A Good Ratio: 1.2 - 2)

9. People in the
company
02
VS

10. People in the company
Hindenburg has made allegations regarding the people involved in Adani.
Allegations 1, 2, 72, 73
Brief of Adani’s response to the
allegations of Hindenburg’s allegations
related to people in the company is:
Accusation is not equal to conviction
and without conviction these claims
are baseless!

11. Company
Management
03
VS

12. Management of the Company
Hindenburg has raised concerns about the management of Adani, including its CFOs (Chief
Financial Officer). Hindenburg has doubts about the competence or integrity of the company's
financial leadership.
Allegations 62, 63, 64, 65
Adani’s response clearly stated the
details of the previous CFOs and
mentioned that most of them are
still at a significant positions
internally and those who left the
firm to be an entrepreneur or joined
another firm without raising Red
flags.

13. Auditing
04
VS

14. Auditing Practice
Hindenburg has questioned the auditing practices employed by Adani. They alleged that the
company's financial statements are not being accurately audited as the auditors aboard are
inexperienced. This raised concerns about the transparency and reliability of Adani's financial
reporting.
Allegations 66, 67, 68, 69
Adani’s response mentioned that all the
stakeholders were aware of “Shah
Dhandharia & Co” being the auditor for the
firm. In the response they rebuked that
Hindenburg mentioned and released
publicly the Personal details of the
Individual Auditors without informing
them or taking their proper approval and
the questioning on the ability and
credibility of certified CAs by ICAI.

15. B. Analysis & Opinion
Political
Economical
Social
Technological
Legal
Environmental
Connection with BJP
Help in the past
Billions wiped off
Need investors confidence
Public faith shaken
Need rebuilding reputation
Allegations don’t impact Tech
Future tech transparency
needed
Attracted rigorous legal
scrutiny
Must ensure Environmental
compliances
PESTLE
Analysis

16. Stock I’ll Pick
Opinion
After the analysis it’s evident that I
may pick the Adani Ports Stock
among others.
One reason being a good Current
Ratio and the future where India will
be exporting a lot of commodities.
Vedanta and other manufacturers will
also propel a lot of shipments through
our western ports.
YES!
Would I Invest?

17. THANK YOU