The recent withdrawal of Adani Green’s planned $1.2 billion USD bond issuance is more than a reaction to market conditions – it’s a powerful signal that investor trust in Adani is eroding beyond repair. The company pulled the plug on the bond sale in its final stages of marketing after investors placed bids at higher yields than the company was willing to pay.
For years, Adani has managed to attract international capital by positioning itself as a leader in renewable energy. This bond issuance aimed to further tap into sustainability-minded investors. However, the bond was suddenly pulled, a move that speaks volumes about investors’ lack of confidence in Adani Group companies, including Adani Green. Those once eager to support Adani’s growth, now see the conglomerate as a reputational and financial liability.
Now, the question for financial institutions is not if they should distance themselves from Adani, but how quickly they can do so to protect their reputations and portfolios.
Two years of controversy
The controversy surrounding Adani is long-standing and deeply entrenched. For the last two years, the conglomerate has been drowning in allegations, from severe financial irregularities to outright corruption, each one raising doubts about its governance and credibility. The timeline of controversies below underscores the mounting risks that, among other factors, may have driven Adani’s bond withdrawal.
January 2023: Hindenburg’s first report: Adani’s fraud and stock manipulation
The unravelling of investor confidence in Adani began with Hindenburg Research’s groundbreaking report in January 2023, which laid bare a series of malpractices. The report, Adani: How the World’s 3rd Richest Man is Pulling the Largest Con in Corporate History, alleged that Adani was engaging in “a brazen stock manipulation and accounting fraud scheme,” using a complex network of offshore shell companies in tax havens like Mauritius to artificially inflate its share prices and obscure the extent of its corporate leverage. These entities were purportedly controlled by close associates of the Adani family, raising serious concerns about related-party transactions and conflicts of interest.
May 2023: Delisting from the UN’s Science-Based Targets Initiative (SBTi)
Adani Green Energy Ltd, Adani Transmission, and Adani Ports & Special Economic Zone were removed from the UN-backed Science Based Targets Initiative (SBTi) in response to formal requests from environmental groups following the Hindenburg report. The delisting came after SBTi assessed that Adani Green’s operations did not align with internationally accepted environmental standards. This move from the leading validator of corporate CO₂ reduction targets sent a strong signal that Adani’s sustainability claims were not credible.
June 2023: Report reveals Adani Green is tied to coal
A report published by the Toxic Bonds Network revealed that Adani Green Energy, the subsidiary responsible for the company’s renewable projects, was closely linked to coal operations. The report compiled evidence that funding into Adani Green Energy was redirected, through collateralisation and related party transactions, to other Adani Group entities directly responsible for coal expansion projects. This evidence included Adani Green’s annual results which reported several related party transactions to Adani entities directly responsible for coal mining and coal-fired power expansion, including for the controversial Carmichael coal mine in Australia.
August 2023: OCCRP’s first investigation: insider trading and market manipulation
The situation intensified when the Organized Crime and Corruption Reporting Project (OCCRP) released an investigation uncovering documents suggesting that associates of the Adani family secretly invested in the group’s shares through offshore funds. This practice potentially violates Indian laws that prohibit stock manipulation and require disclosure of significant share ownership. OCCRP’s findings added credibility to Hindenburg’s report, showing that Adani’s control over its stock valuation was not organic but carefully orchestrated.
May 2024: OCCRP’s Second Report – Overcharging for Coal Imports
Nearly a year after its first investigation, OCCRP published a second report alleging Adani was “overvaluing the coal it sold to power companies”. It reported that Adani Group companies were overcharging the Indian government and citizens for imported coal. This manipulation resulted in inflated prices for consumers while boosting Adani’s bottom line, raising serious ethical and legal questions about the conglomerate’s operations and further damaging its credibility.
May 2024: Snowcap Research exposes Adani Green’s false targets
Shortly after OCCRP’s second report, Snowcap Research released findings that Adani Green was committing a form of investor fraud by employing deceitful accounting practices, inflating earnings and lying about its ability to meet renewable energy targets. By portraying its bonds as low-risk, Adani was allegedly misleading investors. Snowcap found that the Adani Group was using Adani Green to bring in money it could use to expand coal mining and other fossil fuel infrastructure, including the acquisition of numerous coal mines just weeks after the issuance of Adani Green’s green bond in March 2024.
August 2024: Hindenburg’s second report – regulatory complicity and SEBI’s role
In the most recent blow, Hindenburg released a second report, SEBI Chairperson Allegedly Complicit in Adani’s Stock Manipulation. This report alleged that the Securities and Exchange Board of India (SEBI), India’s regulatory body, was complicit in Adani’s financial misdeeds. Hindenburg suggested that SEBI’s leadership had either turned a blind eye or actively enabled Adani’s manipulation of its financial disclosures. The report alleged that SEBI’s chairperson may have directly enabled Adani’s fraudulent practices, creating an environment where regulatory protection for investors was essentially non-existent.
October 2024: Adani pulls its bond due to insufficient investor interest
These revelations culminated in Adani’s withdrawal of its planned $1.2 billion U.S. dollar-denominated bond issuance in October 2024. The bond was intended to tap into sustainability-focused capital, but as evidence of financial misconduct, corruption, deception and greenwashing mounted, the conglomerate couldn’t get enough investors interested to raise over $1 billion in capital.
A warning investors can’t ignore
As each report unfolded, from Hindenburg’s initial findings to OCCRP’s investigations and Snowcap’s environmental exposé, the risks associated with Adani have become impossible to ignore. Financial institutions must take heed, divest from Adani, and protect their portfolios from an increasingly volatile and unethical entity. Continued association with Adani risks financial loss and reputational damage.
For investors committed to responsible and stable investments, the choice is clear: it’s time to walk away from Adani.