Adani’s Longer-Term Hit From Hindenburg May Be Minor: Lucror

Published 26 January 2023, 03:23:39.707 GMT

(Bloomberg) -- The impact of allegations on companies in the Adani group by short-seller Hindenburg Research will “lead to some near-term reputational damage, though the longer-term impact could be minor,” according to Lucror Analytics.  

* Longer-term effects will depend on the group’s response over the coming days, as well as the reaction of regulators, Leonard Law, a senior credit analyst at Lucror, wrote in a note

* “The allegations are not completely new. While there are some new allegations of accounting fraud, we believe these do not appear material enough to impact the financials” of issuers Adani Ports, Adani Transmission and Adani Green, Law wrote

* “It is also uncertain if regulatory consequences would be material, considering some of the old allegations have been ‘resolved’ from a regulatory perspective”

* The allegations have brought the group’s corporate governance issues to the fore and may dampen demand for the group’s dollar bonds among ESG-conscious offshore investors and lead to further spread widening, Law said

By Finbarr Flynn

--With assistance from Abhishek Vishnoi.