New Delhi: Real estate doyen KP Singh on Sunday said that the turmoil triggered in Gautam Adani’s business empire due to damning allegations by a US short seller, Hindenburg, had not shaken the faith of global investors in India.
In an interview to a news agency, Singh also rubbished the perception that banks had lent to Adani group on instructions from higher-ups.
Stocks of Adani’s companies witnessed a continued downswing since January 24 after a US-based Hindenburg research released a report claiming that the group manipulated its stock temporary blip. “This is a temporary blink concerning just one corporate group. It hasn’t harmed faith in India as an investment opportunity,” he added.
He, however, suggested that the Adani group needed to beef up capital and cut down debt to catch up with the high growth trajectory.
Citing his own experience, the real estate major said that once a Canadian firm had threatened to bring out a report when his retail estate firm DLF was bringing out an IPO one-and-a-half-decade back. “We said push-off (to the Canadian firm)… do whatever you can,” he said, adding there are ‘blackmailers’ who bring out reports around any big share sale.
“India is too big a country today. So this story will die down. Investment will not be hurt,” said Singh, while referring to the impact on market due to Adani-Hindenburg row. “Modi is a sensible and dynamic person and so long as he remains Prime Minister India will remain an attractive destination,” he said.
The Adani group’s listed firm lost about $125 billion in market value in three weeks after the report. The group made some recovery in the last couple of days. While the group’s rapid expansion – from cement to hydrogen and data centres, has largely been fuelled by debt funding, Singh, who is now chairman emeritus of DLF, said suggestions that banks lent money to the Adani group because of its proximity with Prime Minister Narendra Modi was baseless.
“I have no clues about Adani but if somebody thinks today that a call from the PM will make bankers give (loan) then they are living in a fool’s world. No banker will do this thing,” claimed Singh.
Citing the example of former ICICI Bank chief executive officer Chanda Kochhar, who was arrested on charges of irregularities in loans to Videocon Group, he asked, “Would any banker do anything which is not according to the regulations? No, they won’t.”
The Prime Minister has not referred to Adani by name since the crisis triggered by the Hindenburg report but earlier this month he told Parliament that the “blessings of 140 crore people in the country are my protective cover and you can’t destroy it with lies and abuses”.
On the troubles facing Adani group, he said entrepreneurs are risk takers but it’s always smart to strike a balance between equity and debt. Adani’s rival Mukesh Ambani has done the smart thing of balancing debt by bringing in equity investors across businesses.
“Every businessman goes through this thing. In your zest for growth, you get debt. (But) Balance debt with equity. And grow again,” he said, adding Adani was trying to do that through the FPO of Adani Enterprises.
Adani group has maintained that its debt of ₹1.96 lakh crore as on September 2022 was balanced with assets it has and the revenues all the businesses are generating. “Always have a healthy balance between equity and debt. At the moment Adani seems to have heavy debt. So I wish him good luck, I don’t know but eventually, he has to beef up his capital,” Singh said.