Valuing ‘Unease’:

Gagandeep Singh
8 min readJan 30, 2023


3 Triggers that cannot be wished away by the Adani Group


I am not an active investor and have no stock market mega-wins to speak of. In many ways, I would be seen as an extremely conservative investor, who has grudgingly been investing small sums of money in index funds and mutual funds. While I have been taught finance and related subjects at IIMA and ISB — I doubt whether I have truly understood financial markets.

As an investor I have begun to value ‘Unease’.

It is a strange feeling that I get in touch with now and then — ‘Unease’ is very difficult to explain to someone — it is partly intuitive and subjective, partly to do with bouts of anxiety and the rest has to do with my misgivings with how non-transparent the Indian financial markets are.

The more I read about the Adani-Hindenburg imbroglio that the media across the world is talking about, the less inclined am I to take sides — for the familiar feeling of Unease is back again.

On one hand, I have some friends who work in the Adani group — these are serious well-intentioned hardworking professionals who are co-creating a large brand in India. They have invested their careers with the Adani group and speak highly of the internal work culture. They carry pride around their membership within.

But there are three triggers of this Unease — and without getting sucked into debates around fraud or attack on the Nation and its financial institutions, I would like to state the following that need to be considered by investors and by the Group.

Trigger 1:

The Auditor

Shah Dhandaria — the small accounting and audit firm of 10–15 employees — 4 partners and 11 employees — many of whom are in their 20s, and who works out of a WeWorks facility, has been the auditor for the Adani Conglomerate in the past few years.

I have nothing against small audit outfits. But I feel a sense of unease when Shah Dhandaria has only one other ‘listed client’ that has a market capitalization of USD 8 Million. The unease increases with no presence of a website.

Audit companies especially the big 4 have been under severe stress over the past 20 years given the nature and history of fraud that has happened in India. Whether it was the Saradha Scam or the Satyam scam or the Nirav Modi Scam or the ABG Shipyard scam or the Bhushan Group or the Amtek Auto — the list goes on and on — all these scams ran into tens of thousands of crores, and a lot of this was attributed to Audit lapses.

The Hindenburg report says — Adani Enterprises alone has 156 subsidiaries and many more joint ventures and affiliates, for example. Further, Adani’s 7 key listed entities collectively have 578 subsidiaries and have engaged in a total of 6,025 separate related-party transactions in fiscal year 2022 alone, per BSE disclosure.” Given this complexity, one wonders at the efficacy of audit and that lends to the unease.

The CFO of the Adani group Jugeshinder Singh has not refuted this complexity and the enormity of audit challenges. In an interview with Business Today Television Managing Editor, Siddharth Zarabi, Singh says that accusing Shah Dhandharia of being a small firm is itself a company of 5–10 employees is unfair. He says, “Look at the irony! Also do you think as a large Indian corporate we have no responsibility to develop Indian vendors? We have no responsibility towards developing the Indian institutional framework? So, if we support the development of a small firm to become a proper, good, accounting firm, how is that a bad thing? Is it not our responsibility? We have 21,000 small vendors,”

I am not into hair-splitting but an audit firm, and its selection is a part of the statutory and financial regulations — the audit firm is not supposed to be a VENDOR but is a watchdog. And yes it is a ‘bad thing’ to Singh’s question. Singh, of course, confirmed that the conglomerate is inviting one of the big 4 companies as another auditor.

This public accusation and defense around the Auditor leaves me feeling uneasy. Even if the conglomerate is leading India into the 21st century with great strides in the infrastructure business, it clearly could devote more energies and consideration on how it builds a credibility in the way funds are being managed. An accomplished auditor or auditors would serve to build its reputation.

Trigger 2

The Adani Debt, Inter-Company lending, and Fears around High Leverage

To the average investor there is no doubt that the Adani group is highly leveraged!

The total debt of the Adani conglomerate has doubled over the past four years to roughly around Rs. 200,000 Crores or $27 billion dollars. Of this total amount, well-known public sector banks including SBI have lent Rs. 75,000 to Rs. 80,000 crores.

Most investors seem to be conflicted on the extent of use of debt or leverage by the Adani group. Some have stated that Adani Group is fueled by debt and a possible house of cards. This conflict normally gets associated with risk appetite and generally a debate between the bears and the bulls, but the Adani narrative goes beyond just the differences on your and my risk appetite.

Fitch Group’s CreditSights group published a report last year (2021) warning that the Adani Group is “deeply overleveraged.” CreditSights later clarified their errors and how they had to reconcile some of the figures for Adani Transmission and Adani Power, but still carried concerns of over-leverage.

The Adani management have continually maintained that they know how to leverage debt. In December 2022, Mr. Gautam Adani stated publicly — “that the group is financially strong, and its profits are growing twice the rate of its debt.” He was also keen to point out that the noise around over-leverage comes from two categories of people — the first category that do not understand the detailed nuances of debt and finances of the company, the second category comprise of people with vested interests, deliberately creating confusion and wanting to tarnish the reputation of the Adani group.

This statement by Mr. Adani is provocative — it leaves all of us — who are more conservative and risk averse with a Hobson’s choice -

· Either choose category 1 and own up your identity of an ignorant investor

· Or confess to being in cahoots with category 2 investors who have male fide intent and if you are an Indian — who carry self-hate and envy against a conglomerate that is partnering nation building.

It is this choiceless-ness that creates intrigue and unease! But it is not the extent of leverage alone that creates the unease but inter-company transactions.

The Hindenburg report has brought to light on the inter-company lending, where Hindenburg alleges that inter-company lending allows the conglomerate to launder money and cook their books. They also refer to US$10 billion raised from US in the shape of bond sales between 2019–21.

The media in the past has talked about inter-company lending in the past three years — this has not been Hindenburg’s concern alone. In 2019, Indian news outlet published an investigation on Adani Group’s web of related party deals, including how Adani-owned entities “saw multiple transfers of money between themselves in the form of loans and repayments.”

Trigger 3:

The Adani Défense — why does it need to be a jingoistic hyperbole?

The rejoinder from the Adani group has been the third trigger — as opposed to assuaging the concerns of the investor, it has been bombastic and hyperbolic.

As per the Hindu — on 29th January — In a strong worded rejoinder, the Adani Group claimed, “This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.” It further said that the “Hindenburg Research has conveniently ignored the Indian judiciary and regulatory framework.”

I find this stance very intriguing — it creates more problems and questions as opposed to clarifying and satisfying. I would have been far happier had the Adani group grilled Hindenburg on short-selling and negatively influencing the issue of shares.

The Hindenburg rebuttal has been more hard hitting. They have stated — “Adani Group has attempted to conflate its meteoric rise and the wealth of its Chairman, Gautam Adani, with the success of India itself. We disagree. To be clear, we believe India is a vibrant democracy and an emerging superpower with an exciting future.” It added, “We also believe India’s future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation.” Perhaps the most hard-hitting line that is quoted is — “Fraud cannot be obfuscated by nationalism

As a neutral investor, I find that the Adanis seem to be losing a battle that they should have ideally won!

The Adani share issue is not a political manifesto — to influence vote-banks — it is meant to be an objective note to garner funds from rational investors. These investors — retail or institutional are not meant to be influence or governed by jingoism nor by confirmation bias. It is unthinkable to believe that an investor such as I would want to invest into Adani as way of committing to nation-building — there are too many variables to ponder over. It is almost as if the Adanis have errored in confusing the investor with the Indian voter

Or maybe I have gotten it wrong.

Maybe it is the ‘voter’ they would want as a shareholder and the coming months and years would point out how terribly dumb, I was in writing about my unease, and how clever were they to drape their offering in the Indian flag and evoke investment. Afterall no other large conglomerate such as TATAs or BIRLAs has unequivocally leveraged in-your-face nationalism. If nationalism can get you votes — surely it can also garner you money from the same vote-bank and this could be an innovative platform by Adanis.


The Unease — where does one go from here?

If the Adani group emerges as a winner, it will only confirm the sheer envy of the world as it sees an India shining phenomena. Envy leads to willful sabotaging or schadenfreude from all stakeholders involved — and as an uneasy investor, I would have to ask very tough questions of myself. Am I a product of the western colonized mind who finds it difficult to acknowledge and embrace Indian wisdom and Indian management ideologies that create successful stories like an Adani. Have I become cynical and envious to even accept a meteoric rise of a man and a conglomerate?

If the Adani group gets mired into financial mires and messes in the future, it would create a huge collateral damage. While the uneasy investor like me feels validated, it would bring tremendous misery to the markets, to banks and insurance firms, and to governments that have been open in their partnering and support. Most importantly it will create more shame as an Indian denizen where Indian businesses may be compared to similar businesses that were or are encouraged by Russian mafia, Putin’s henchmen, and all that stuff.

The Adani Hindenburg is an interesting dilemma to work with for all investors. I am not sure there are easy answers beyond the instrumental options — between opportunistic shorts or romantic longs …



Gagandeep Singh

I work in the realm of Organization Development and focus on transformation, alignment and culture. I am doing my doctoral research on hybrid social enterprises