Gautam Adani maps comeback strategy after $132 billion Hindenburg rout

MUMBAI: Almost a month after a bombshell short seller report lopped off $132 billion in market value from Gautam Adani’s empire, the Indian billionaire has hired top-shelf US crisis communication and legal teams, scrapped a $850 million coal plant purchase, reined in expenses, repaid some debt and promises to repay more.
The ports-to-power conglomerate helmed by Adani — who used to be Asia’s richest person — is hoping to claw back the narrative with this playbook and calm jittery investors and lenders after US-based Hindenburg Research on Jan. 24 accused it of accounting fraud, stock manipulation and other corporate governance lapses. The Adani Group denies these allegations.
Adani and his aides have been in damage repair mode ever since. Besides a campaign to portray themselves as responsible borrowers with prepayments and on-time payments of debt, executives have also kicked off a series of meetings to pacify overseas bondholders, who were tapped by the tycoon for more than $8 billion funding in recent years.

Reflecting the group’s realization of the severity of the hit to its image, it has brought in Kekst CNC as a global communications advisor, Bloomberg News reported February 11. The public relations firm co-headquartered in New York and Munich is known for its work with other corporate blow-ups in recent years, like WeWork Inc’s valuation implosion in 2019.
Kekst’s mandate is to help the group regain investor trust by laying out the proper context, not just on the Hindenburg allegations but other concerns that have swirled around the fundamental strength of the business, a person familiar with the matter said.
Kekst is working with Adani’s C-suite and communications team, and could put them through a “situation room” — the firm’s term for a simulated crisis in which executives are bombarded with tweets, calls from journalists and other stressful developments, said the person, who asked not to be named as they’re not authorized to speak publicly.

The Adani group has also engaged American law firm Wachtell, Lipton, Rosen & Katz to fight back against the short seller’s claims, the Financial Times reported citing unnamed sources. Wachtell is one of the most expensive US law firms and has experience in defending clients facing attacks by shareholder activists.
A spokesperson for Adani group didn’t immediately respond to a request for comment. Kekst declined to comment, while Wachtell didn’t respond to requests to comment.
‘Lingering questions’
The moves show that “Adani, even after the stock market bloodbath, can still afford good lawyers,” said Bhaskar Chakravorti, the dean of global business at Tufts University’s Fletcher School. “As a global investor, I would still have lingering questions.”
His comments reflect how the saga has grown beyond the group to cast a shadow on India’s ability to rival China as an investment destination, sparking speculation from billionaire investor George Soros that it might even spur a “democratic revival” in the country. Adani is perceived to be close to Prime Minister Narendra Modi, who has not directly addressed the issue, but has lashed out at opposition parties who have called into question his relationship with
Narrative aside, investors say they’re watching two things: the group’s high leverage ratios and its ability to generate cashflow after losing $2.5 billion in fresh funds from its withdrawn share sale