MUMBAI: Gautam Adani, the chairman of the Adani Group, shared insights into the Hindenburg attack and the group’s response strategies, in a candid reflection on one of the most challenging episodes in recent corporate history in question/answer round in an event on Wednesday held in Mumbai.
Acknowledging the severity of the Hindenburg attack, Adani affirmed it as the world’s most significant assault on a corporate entity. He emphasised its unique nature, combining financial market pressures with political theatrics, fueled by sections of the media both domestically and internationally.
Adani said, “Yes, the Hindenburg attack on Adani was the world’s biggest attack on a corporate. I also have no hesitation in saying that this attack was a unique two-dimensional attack, compared to typical short-seller attacks which are one-dimensional”.
He added, “This attack on us not only played out in the financial market but also played out in the political theatre. Both played out in conjunction, complementing and reinforcing each other, ably supported by a section of the media, both in India and abroad”.
Recalling his initial reaction to the news, Adani described a sense of familiarity with recycled allegations, anticipating a transient impact akin to previous challenges. Despite underestimating its depth initially, the gravity of the situation soon became apparent. Amidst the storm, Adani maintained an active schedule, attending high-profile events while simultaneously grappling with the unfolding crisis.
Adani said, “I remember vividly that, on the 25th and 26th of January, I attended weddings in Mumbai and Bhopal. The next day, I called on the President of Egypt. Right after that, I was in Israel with Prime Minister Netanyahu to formally take over the Port of Haifa.”
He added, “I have to admit that, initially, we grossly underestimated the impact of this report. However, very soon, we understood the conspiracy and its depth. With no precedence to handle a crisis of this nature and magnitude, we evolved our own contra-strategy to handle it – and the rest, as they say, is history”.
To counter the attack, the Adani Group swiftly implemented a multi-faceted strategy. Notable measures included returning Follow On Public Offer (FPO) proceeds, bolstering cash reserves, and preemptively addressing financing concerns. Moreover, Adani prioritized shielding key executives from external noise, enabling them to focus on core business operations.
The group’s commitment to growth remained unwavering, evidenced by the continuation of expansion projects despite the tumultuous environment. Adani said, “There were several steps which we took- returned the FPO proceeds of Rs 20,000 crore on moral grounds, created a strong war-chest of cash of Rs 70,000 crore, prepaid Rs 17,500 crore of margin-linked financing, insulated my CEOs and executives from the noise”.
He added, “I told them to tighten their belt and focus on business, maintained the growth momentum and continued with expansion and new projects like Khavda, Dharavi, copper smelter – just to name a few, created a war-room and answered all questions, executed an extensive engagement program with all our stakeholders.”
Crucially, Adani highlighted the significance of effective communication and stakeholder engagement as pivotal to navigating crises. Recognizing the importance of transparency, the group established a dedicated war room to address inquiries promptly and comprehensively.
Through an extensive engagement programme, the Adani Group reaffirmed its commitment to stakeholders, fostering trust amidst uncertainty. Reflecting on the experience, Adani underscored two key learnings: the paramount importance of liquidity, encapsulated by the adage ‘cash is king,’ and the necessity of proactive communication to mitigate reputational damage.
Adani said, “Talking about learnings, while there are many, the two key takeaways are- Cash is king and the importance of engagement and strong communications with all stakeholders. Our biggest learning was that doing a good job is not enough – we must tell our story too. We need to communicate more – and communicate timely and more effectively.”
Despite the adversity faced, Adani expressed regret for the retail shareholders who incurred losses, reaffirming the absence of merit in the allegations levied against the group.
Gautam Adani, Chairman of the Adani Group, reflected on the genesis and success of Mundra Port, highlighting its unique attributes that have propelled it to become a paragon of infrastructure excellence. Adani said, “The most defining characteristic of Mundra is that it is the first port conceived, designed and developed by a user. I used all my first-hand experience of my journey from jetty to jet in building it. “
Mundra Port stands out as the first port conceived, designed, and developed by a user — a distinguishing feature that stems from Gautam Adani’s firsthand experience navigating the challenges of maritime logistics. Drawing from his journey “from jetty to jet,” Adani imbued Mundra Port with a deep understanding of user needs, setting a precedent for user-centric infrastructure development.
Adani said, “First, Mundra offered a whole bouquet of services at a reasonable cost with a single-window facility — and the user did not have to approach multiple agencies. Second, empowerment of middle-level functionaries to take decisions for faster clearances. These powers were not there even with the chairmen of ports like JNPT”.
Adani added, “Third, rapid expansion of infrastructure without looking at the linear growth, etc. In Mundra, there was no waiting time for ships – and berths were always available. Whereas, in other ports, the ships had to queue up for days to get a berth. Not many people know that, for shippers, the most important criterion for deciding the port is the turnaround time, and not the associated costs and charges.”
Gautam Adani, shared insights into the intricacies of infrastructure development in India, shedding light on the challenges faced by the sector and unveiling his strategic approach to navigating them. Adani said, “In my mind, infra development is the most challenging business, not only in India but anywhere in the world.”
He added, “There are 3 main reasons for failure in infra- One, in India, we never embarked on a planned systemic reform with a long-term roadmap, second, in the Indian banking system, there is a structural deficiency in infra project financing, largely due to asset liability mismatch and third, the Role of the Regulator”. (ANI)
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