After Nearly Collapsing, Indian Billionaire’s Stock Is Back on the Rise

The Adani Group, a conglomerate that builds and operates ports, power lines and food factories across India, began the year nearly on top of the world — having increased in value tenfold over the previous two years. Its founder and chief executive, Gautam Adani, was ranked the second-richest man on Earth last summer, just behind Elon Musk.

Then it crashed even more quickly than it had shot up. Hindenburg Research, a boutique investment firm, issued a report on Jan. 24 claiming the company had inflated its stock through financial gimmickry. That firm had bet that Adani’s shares would tank, and down they went: By the end of February, the Adani Group’s 10 publicly traded stocks had lost two-thirds of their value, a hit of nearly $150 billion. The report persuaded nearly everyone to head for the exits.

The Adani Group hung on, however. This week it is riding its biggest rally since the downfall. Its flagship stock, Adani Enterprises, gained 31 percent in four days. Another unit of the empire, Adani Ports, has recouped its losses completely. Bullish voices say the whole group might rise by another 15 to 20 percent this year.

There were many factors behind the Adani Group’s survival over the past four months. It had loyal investors among Indian state-run institutions, and bargain hunters came in and bought stock on the low. The other reason: Adani had tangible assets, mostly infrastructure projects, that were there for everyone to see. These businesses, whatever they were worth, had value that many investors found appealing.

But the trigger to this week’s burst of optimism came indirectly from the Indian government.

On Friday, a committee assembled by India’s Supreme Court after the bombshell allegations in January said, in effect, that India’s financial regulators were doing the best they could in their oversight of the Adani Group, but had failed to penetrate the confusing ownership structures behind its funding. What’s more, they probably never will, having “drawn a blank.”

That is a frustrating situation for the agencies involved in protecting India’s capital markets and might give pause to many investors. But for investors sold on the Adani Group it came as sweet relief. The court asked the main regulator, known as the Securities and Exchange Board of India, to finish its business by Aug. 14, whether or not it manages to explain who owns the funds that helped Adani’s shares grow tenfold since 2021. Otherwise, the report said, its work might go on endlessly, “a journey without destination.”