Adani Exports Limited started as a commodity trading company in 1988 and expanded into importing and exporting multiple commodities. With a capital of ₹5
lakhs, the company was established as a partnership firm with the flagship company Adani Enterprises, previously Adani Exports.[23]
In 1990, the Adani Group developed its own port in
Mundra to provide a base for its trading operations. It began construction at Mundra in 1995. In 1998, it became the top net foreign exchange earner for India Inc.[24] The company began coal trading in 1999, followed by a joint venture in edible oil refining in 2000 with the formation of Adani Wilmar.[25]
Adani handled 4 Mt of cargo at Mundra in 2002, becoming the largest private port in India. Later in 2006, the company became the largest
coal importer in India with 11 Mt of coal handling.[24]
The company expanded its business in 2008, purchasing
Bunyu Mine in Indonesia which has 180 Mt of coal reserves. In 2009 the firm began generating 330 MW of thermal power. It also built an edible oil refining capacity in India of 2.2 Mt per annum.[24]
In 2010, Adani group with help of
Petronet LNG will set up a solid cargo port through a Joint Venture company namely Adani Petronet (Dahej) Port Private Ltd., has already commenced its Phase 1 operations from August 2010 at Dahej Port. solid cargo port terminal would have facilities to import/export bulk products like coal, steel and fertilizer. PLL has 26% equity in this JV.[26][27]
The Adani group became India's largest private coal mining company after Adani Enterprises won the Orissa mine rights in 2010.[28] Operations at the
Port of Dahej commenced in 2011 and its capacity subsequently grew to 20 Mt. The company also bought
Galilee Basin mine in
Australia with 10.4 gigatonnes (Gt) of coal reserves.[29] More than 60 percent of the Adani Group's revenue is derived from coal-related businesses.[14]
In 2011, the Adani group also bought
Abbot Point port in Australia with 50 Mt of handling capacity. It commissioned India's largest solar power plant with a capacity 40 MW. As the firm achieved 3,960 MW capacity, it became the largest private sector thermal power producer in India. In 2012 The company shifted its focus on three business clusters – resources, logistics and energy.[30]
Adani Power emerged as India's largest private power producer in 2014.[31] Adani Power's total installed capacity then stood at 9,280 MW.[32] On 16 May of the same year, Adani Ports acquired Dhamra Port on East coast of India for ₹5,500 crore (equivalent to ₹88 billion or US$1.1 billion in 2023).[33] Dhamra Port was a 50:50 joint venture between
Tata Steel and
L&T Infrastructure Development Projects, which has been acquired by Adani Ports. The port began operations in May 2011 and handled a total cargo of 14.3 Mt in 2013–14.[34] With the acquisition of
Dhamra Port, the group is planning to increase its capacity to over 200 Mt by 2020.[35][36]
In 2015, the Adani Group's Adani Renewable Energy Park signed a pact with the
Rajasthan Government for a 50:50 joint venture to set up India's largest solar park with a capacity of 10,000 MW.[37] In November 2015, the Adani group began construction at the port in
Vizhinjam,
Kerala.[38]
Adani Aero Defence signed a pact with the Israeli arms manufacturer,
Elbit-ISTAR, and Alpha Design Technologies to work in the field of Unmanned Aircraft Systems (UAS) in India in 2016. In April, Adani Enterprises secured approval from the
Government of Gujarat to begin work on building a solar power equipment plant. In September,
Adani Green Energy (
Tamil Nadu), the renewable wing of the Adani Group, began operations in
Kamuthi in
Ramanathapuram, Tamil Nadu with a capacity of 648 MW at an estimated cost of ₹4,550 crore (equivalent to ₹65 billion or US$820 million in 2023).[39] In the same month, the Adani Group inaugurated a 648 MW single-location solar power plant. It was the world's largest solar power plant at the time it was set up.[39]
On 22 December 2017, the Adani Group acquired the power arm of
Reliance Infrastructure for ₹18,800 crore (US$2.89 billion).[40]
In October 2019,
French oil and gas company
TotalEnergies bought a 37.4% stake in Adani Gas for ₹6,155 crore (US$874.04 million) and obtained joint control of the company.[41] Total also invested US$510 million in a subsidiary of Adani Green Energy in February 2020.[42]
In August 2020, Adani Group obtained a majority stake in
Mumbai and
Navi Mumbai airports after entering a debt acquisition agreement with
GVK Group.[43] Through a
concession agreement with the
Airports Authority of India, Adani Group also obtained a 50-year lease on Ahmedabad, Guwahati, Jaipur, Lucknow, Mangalore and Thiruvananthapuram airports.[44]
In May 2022, the Adani Group acquired
Ambuja Cements and
ACC for $10.5 billion. The deal will make the Adani Group the second largest cement maker in India.[46]
In May 2022, UAE-based conglomerate International Holding Company (IHC), headed by Syed Basar Shueb, invested US$2 billion in three Adani Group companies, namely Adani Green Energy, Adani Transmission and Adani Enterprises.[47][48] In June 2022,
TotalEnergies acquired a 25% stake in Adani New Industries, the newly formed
green hydrogen subsidiary of
Adani Enterprises, for US$12.5 billion.[49]
The Adani Group launched in 2014, with the support of a part of the Australian Government and Queensland, a mining and rail project (
Carmichael coal mine) in Carmichael in
Queensland's
Galilee Basin for $21.5 billion[52] over the life of the project, i.e. 60 years.[52] This mine is one of many coal mines in Queensland, Australia. Its annual capacity would be 10 Mt of thermal coal.[53]
This project will occupy an area of 35,000 hectares (86,000 acres). In response to activist pressure some international banks refused to finance it,[54] and in November 2018, Adani Australia announced that the Carmichael project would be 100% financed by Adani Group resources.[55] In July 2019, the project received its final approvals from the Australian Government and construction of the mine commenced.[56]
In 2015, the then-head of Adani's Australian mining division came under scrutiny due to his association with a mining pollution incident in
Zambia, sparking renewed concerns about Adani's suitability to manage the Carmichael coal mine. According to a collaborative report from Environmental Justice Australia, Jeyakumar Janakaraj held significant positions at a mining company that faced criminal charges related to the contamination of the
Kafue River in Zambia. This occurred before he assumed leadership role of Adani's operations in Australia. Specifically, Janakaraj served as the operations director at
Konkola Copper Mines in 2010, when the company faced legal charges concerning the discharge of hazardous wastewater into the river.[57] However, the Australian government characterized Adani's omission of Janakaraj's involvement in the African pollution incident as a "mistake."[58] Although, under section 489 of Australia's Environmental Protection and Biodiversity Conservation Act 1999, presenting inaccurate or deceptive information could potentially constitute an offense, the federal government has opted not to pursue any legal action against Adani.[59]
In 2020, Adani Mining changed its name to Bravus Mining and Resources.[61]
On 29 December 2021, Bravus announced that the first shipment of high-quality coal from the Carmichael mine had been assembled at the
North Queensland Export Terminal (NQXT) in
Bowen ready for export as planned.[62]
Cronyism
Chairman and MD Gautam Adani has been described as being close to former
Chief Minister of Gujarat and Indian Prime Minister
Narendra Modi and his ruling
Bharatiya Janata Party (BJP).[63] This has led to allegations of
cronyism as his firms have won many Indian energy and infrastructure government contracts.[64] In 2012, an Indian government auditor accused Modi of giving low cost fuel from a Gujarat state-run gas company to the Adani group and other companies.[65][66] In Jharkhand, the BJP-led state government made an exception to its energy policy for Adani's
Godda power plant.[14] Both the Adani Group and Modi's government have denied allegations of cronyism.[66]
Leverage
The company's
corporate debt totaled $30 billion in 2022.[67] In August 2022, CreditSights, a unit of
Fitch Ratings, warned that Adani's recent aggressive expansion had hurt the group's
cash flow and
credit metrics. It also stated that a potential "worst-case scenario" could lead the group to end up in a
debt trap and a potential
default.[68][69] The CreditSights report garnered significant attention for its dire assessment of Adani's "deeply
overleveraged” book; after outreach by Adani, CreditSights softened its language but kept its main conclusion.[70]
Stock market rigging
In 2007, the
Securities and Exchange Board of India (SEBI) prohibited multiple Adani companies from engaging in the purchase or sale of securities for a period of two years.[71] This action was taken due to their involvement in a manipulation scheme that occurred between 1999 and 2001 to artificially influence stock prices. This manipulation was carried out through entities overseen by
Ketan Parekh, the stockbroker who was the main accused in India’s biggest stock market scandal.[72] After paying a fine of $140,000, the companies were eventually permitted to recommence their trading activities.[71]
Tax evasion
On 27 February 2010,
Central Bureau of Investigation arrested Rajesh Adani, managing director of Adani Enterprises Ltd., on charges of custom duty evasion amounting to ₹80
lakh.[73]
In August 2017,
Indian customs alleged the Adani Group was diverting millions of funds from the company's books to Adani family tax havens overseas. Adani was accused of using a
Dubai shell company to divert the funds.[74] The details of a $235 million diversion were obtained and published by The Guardian.[75] In 2014, the
Directorate of Revenue Intelligence mapped out a complex money trail from
India through
South Korea and
Dubai, and eventually to an offshore company in
Mauritius allegedly owned by
Vinod Shantilal Adani, the older brother of
Gautam Adani.[76] Same year, DRI forwarded a letter to the then SEBI chairperson,
U. K. Sinha, along with a CD containing evidence suggesting the improper diversion of Rs. 2,323 crore.[77] Additionally, they provided two investigative notes, cautioning that the group might be involved in manipulating the stock market through funds allegedly siphoned off using the strategy of overvaluing power equipment imports. However, SEBI did not publicly acknowledge the receipt of this letter and the accompanying evidence from DRI until September 2023, when it was disclosed before the
Supreme Court of India.[78]
Corporate governance issue
According to
Bloomberg News, the group has been found to be maintaining dubious business relations with an engineering contracting firm, Howe Engineering Projects.[79] This firm acquired the engineering business of PMC Project in 2016. In the past, PMC Projects, an Adani contractor, was accused of inflating the value of imported power and infrastructure goods by nearly ₹1,500 crore. Howe, now a separate entity, continues to work as an Adani contractor (just like PMC Projects) for major ports and railway lines being built in India.
Deloitte raised concerns in May 2023 about payments made by Adani's ports company to Howe, unable to determine whether Howe should be considered a related party.[80] Also, Adani Group had not publicly disclosed these payments until Deloitte highlighted them.[81]
Stock manipulation and accounting fraud allegations
In January 2023,
Hindenburg Research published the findings of a two-year investigation alleging that Adani had engaged in market manipulation and accounting malpractices. The report accused Adani of pulling "the largest
con in corporate history"[16][82] and "brazen stock manipulation and accounting fraud scheme over the course of decades".[16][83] Hindenburg also disclosed that it was holding
short positions on Adani Group companies.[84][85][86] Bonds and shares of companies associated with Adani experienced a decline of more than $104 billion in market value after the accusations,[87][88][89] representing approximately half of the market value.[90] Hedge fund manager
Bill Ackman said Hindenburg's Adani Report was "highly credible and extremely well researched."[91][92] Adani denied the fraud allegations as without merit.[93]
On 29 January, Adani released a 413 page response to the Hindenburg report, calling Hindenburg’s conduct a "calculated securities fraud"[94] and the report a "calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India."[95] Hindenburg characterized the response as failing to engage with the issues raised by its initial report, and an exercise in obfuscation under the garb of nationalism.[96] On 1 February, Adani cancelled its planned $2.5 billion (Rs 20,000 crore)
Follow-on Public Offer (FPO) citing market volatility, and announced that it would return the FPO money to investors.[97]Reserve Bank of India sought details from banks on exposure to Adani firms.[98]Citigroup's wealth unit stopped extending margin loans to its clients against securities of Adani Group.[99]Credit Suisse Group AG stopped accepting bonds of Adani Group companies as collateral for margin loans to its private banking clients.[100][101]S&P Dow Jones Indices removed Adani Enterprises from its sustainability index.[102]
Norway's Oil Fund, which had already shed a bulk of its Adani shares pre-Hindenburg report, divested its entire stake following the report.[103][104]
On 19 May, on prima facie, a committee formed by the
Supreme Court of India communicated its inability to conclude regarding the existence of a regulatory failure concerning the accusation of stock price manipulation by the group. This was primarily due to the insufficient information provided in the explanations by the
SEBI's investigation.[105][106] Earlier on 29 April, SEBI requested a six-month extension to conclude its investigation, instead of the initially given two months provided on 2 March.[107] However, the Supreme Court granted a three-month extension and directed SEBI to complete the probe by 14 August 2023.[108]
On 31 August 2023, the
Organized Crime and Corruption Reporting Project put forth allegations asserting that a substantial amount of funds, in the hundreds of millions of dollars, were directed into publicly traded stocks of the Adani Group.[111] These investments purportedly occurred by means of investment funds situated in Mauritius, which are characterized as possessing a lack of transparency. These funds were reportedly associated with partners connected to the promoter family.[112] Supporting evidence presented in the report indicates that these entities engaged in protracted activities involving the acquisition and divestiture of Adani stock through offshore mechanisms, thereby concealing their active participation.[113] This covert engagement apparently yielded significant financial gains. Additionally, the documentation suggests that the overseeing investment firm compensated a company belonging to Vinod Adani for advisory services pertinent to their investment pursuits.[114]
In October 2023, the
National Financial Reporting Authority initiated an investigation, reaching out to several audit firms involved in examining the financial records of the Adani Group's listed companies.[115][116]
On January 3, 2024, the Supreme Court ordered SEBI to complete its probe within 90 days (3 months),[117] sparked by allegations from short-seller
Hindenburg Research. The Court dismissed requests for an SIT or
CBI investigation and shifted focus to Hindenburg’s conduct.[118][119][120]