Abu Dhabi’s International Holding Company (IHC) has announced its intention to invest $400 million in the follow-on public offering (FPO) of Adani Enterprises, one of India’s largest conglomerates.
The FPO is set to raise nearly $2.5 billion and will enable the company to reduce its debt and provide additional capital for growth. IHC’s investment will further strengthen the financial position of Adani Enterprises and support its plans for expansion.
This investment is a significant show of support for Adani Enterprises despite recent allegations of financial irregularities by US-based short-selling firm Hindenburg Research.
Hindenburg Research has recently published a report titled “Adani Group – How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History” alleging that Adani Enterprises has engaged in various financial irregularities, including overstating its earnings and assets.
The report also claims that the company has used aggressive accounting practices and that its debt levels are much higher than reported. It also alleged that the conglomerate was being run like “a family business” with Adani’s family members “controlling the group’s finances and key decisions”.
Adani Enterprises, on the other hand, has questioned Hindenburg’s credentials and argued that it’s a “calculated attack on India, the independence, integrity, and quality of Indian institutions, and the growth story and ambition of India”.
The conglomerate has responded to the allegations by publishing a 413-page response on January 29, stating that Hindenburg’s report is “baseless and motivated by vested interests.” The company has also pointed out that its financial statements are audited by leading accounting firms and that it complies with all regulatory requirements.
Despite these allegations, IHC has decided to move forward with its investment in Adani Enterprises, citing the company’s strong track record and its potential for growth. “Our interest in Adani Group is driven by our confidence and belief in the fundamentals of Adani Enterprises Ltd; we see a strong potential for growth from a long-term perspective and added value to our shareholders,” said Syed Basar Shued, CEO of IHC.
