Foreign brokerage Jefferies has come out with a profiling on the $105 billion diversified conglomerate Adani group, whose business focus spans across utility, logistics, infrastructure and other adjacencies. 
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Foreign brokerage Jefferies has come out with a profiling on the $105 billion diversified conglomerate Adani group, whose business focus spans across utility, logistics, infrastructure and other adjacencies. Foreign brokerage Jefferies has come out with a profiling on the $105 billion diversified conglomerate Adani group, whose business focus spans across utility, logistics, infrastructure and other adjacencies. Adani Enterprises Ltd is a business incubator, Jefferies said while adding that Adani Ports is a market leader gaining share. Adani Transmission Ltd is a play on T&D; Adani Green is a pure renewable energy (RE) generation play, it said while noting that the Adani group firm plans to scale up business by 5.6 times by 2023. Jefferies described Adani Wilmar as edible oil major, diversifying into foods business. Ambuja Cements is eyeing significant scaleup in next five years while Adani Total Gas is targeting industry leading growth, the foreign brokerage noted.
In a detailed note, Jefferies jotted down key questions raised by the US-based short seller Hindenburg allegations and replies by the Adani group on the same.
Adani group financials
Jefferies noted that Adani group's revenue grew 23 per cent compounded annually over FY18-23; Ebitda and profit after tax during the same period grew 20 per cent and 40 per cent annually, it said. Leverage stood at 4.2 times net debt/Ebitda (ex OI) on a trailing 12-month basis, as of FY23-end. Ebitda calculation excludes other income, Jefferies said.
Including the seven listed businesses and cement businesses, total net debt for the Adani entities stood at $25 billion or Rs 21 lakh crore, as of FY23 end. Some nascent businesses, being in early stage, may not be reflecting appropriately in Ebitda as of FY23, thus optically inflating net debt/trailing Ebitda, it said.
Also Watch: How Adani Group listed companies' net debt has ballooned in last 5 years
Timeline post Hindenburg report
The below two tables suggests key developments and regulatory updates by the Adani group post Hindenburg report.
Here is another table that suggests pledges at Adani group companies:
Hindenburg allegations: Adani group replies
The US-based Hindenburg Research made several allegations on Adani group's working in its January 24 report. Adani group has refuted such reports so far.
Among many allegations, the Hindenburg report suggested that Gautam Adani’s younger brother, Rajesh Adani, was accused by the Directorate of Revenue Intelligence (DRI) of playing a central role in a diamond trading import/export scheme around 2004-2005. It alleged there were subsequent arrests over allegations of customs tax evasion, forging import documentation and illegal coal imports.
"Given his history, why was he subsequently promoted to serve as Managing Director at the Adani Group?," Hindenburg had asked in its report .
The Hindenburg suggested that Adani has been subject to numerous allegations of fraud by the DRI and other government agencies. In the 2004-2006 diamond scandal investigation, the government alleged that Adani Exports Ltd (renamed Adani Enterprises) and related entities’ exports were 3 times the total exports of all the other 34 firms in the industry group put together.
"How does Adani explain that sudden surge in trading volume?," Hindenburg asked.
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Jefferies in a detailed table cited the Adani group's response to at least 65 such allegations. Here's the table:
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