Upside down around?

Led by Gautam Adani, the Adani Group has 7

publicly listed companies and 578 subsidiaries,
largely controlled and managed by his family.

These companies at the time of the report held a

market value of $200 bn .
To give you perspective that’s the GDP of Qatar.
Yes - the same Qatar that hosted the 2022 FIFA
World Cup.

Gautam Adani’s networth in 2018 : $20 bn

Gautam Adani’s networth in 2022 : $120 bn
Wait, what?
My annual salary increment is 10%.
How is 6X from $20 to $120 bn even possible?
By a process called round tripping that
manipulates stock prices and asset valuation
through shell companies .

But, how exactly does this work?

These shell companies are of 2 types:

1. One stack is an ‘industrial shell stack’ that

buys capital assets such as machinery from
market and sells to listed Adani companies
such as Adani Enterprises, Adani Ports at
inflated prices. These shell companies are
managed by the Adani family themselves.

2. The excess (inflated) money received in

stack 1 shell companies is siphoned to stack 2
shell companies or ‘investment shell stack'
which 'invest back' in the listed Adani
companies.
 Vinod Adani

Pumping
Shell Inflated Adani Enterprises
Shell
payments

of money
Stack 1 Adani Ports
siphoned Stack 2

Adani Green Energy

Adani Total Gas

Industrial Adani Transmission Investment

Adani Power

Inflated Adani Wilmar

invoices

Equipment
delivery Money
siphoned
Actual
Actual
Invoice
payment OEMs

Adapted from Mahua Moitra, Leader of Opposition in a Twitter post in 2019

The Adani group has atleast 38 shell
companies based out of Mauritius, Cyprus,
Carribean, UAE and Singapore
Okay, so their own money exchanges hands.
What’s the big deal?
It is a big deal.
This circular trading also called round tripping
gives a perception of economic growth
(because every company in the process gets
to record revenue without any real growth or
value). This perception increases the market
value of the listed Adani companies.

Because the market value keeps on

increasing, so does the networth of Gautam
Adani and his family.

They then pledge their own shares to

financial institutions to secure more debt
from them.
But, this quick?
All it took was 4 years?
Looks like a history of scams.
Hhmm, hold your breath. Some crazy numbers.

2006 :
A diamond scandal through circular trading (or
round tripping) to gain illicit tax credit from the
government ~ Rs 680 crore.

2010 :
A similar iron ore scandal ~ Rs 600 crore

2014 :
A similar power plant scandal ~ Rs 4000 crore.

2016:
A similar coal scandal - Rs 29000 crore
Who manages these shell companies?
Vinod Adani, elder brother of Gautam Adani.

And who executes?

Rajesh Adani, younger brother of Gautam Adani
Samir Vora, brother-in-law of Gautam Adani.

Vinod, Rajesh and Samir have time and again

been arrested but discharged with penalties.
How are we so sure that
those indeed are shell companies
and not genuine vendors or funds?
These shell companies do not have a tangible
offline or online presence.
Infact, most of these companies had their
website domains registered on the SAME dates
with SAME website templates.

They also do not have any other concrete

business clientele or vendors - just the Adanis.

30-47% of Adani’s share trade volume is

executed by these shell companies alone.

Leaked emails of these shell companies show

tangible association with Ketan Parekh, a
convicted stock broker known for rigging stocks
What do the
subject matter experts say?
Only 2 analysts cover the Adani Group on an
average. With the kind of market value the
Adani Group has, there should be dozens of
analyst coverages. The analysts allege that they
want to steer away from covering highly
speculative stocks like these.

Hhhm, true.
The group as per the report is overvalued to the
tune of 85%.
Per the annual reports,

5 out of 7 companies have a current ratio of < 1

meaning they have very low liquidity
and
4 out of 7 companies have negative free cash flows
No domestic mutual fund has more than 1% of
it’s asset portfolio invested in the Adani Group.

This only shows that the group is not at all

investible.
There is no other reason why MFs would not
invest in Adani companies when these
companies are a part of national and
international indices already.
What happened to
corporate governance?
Frankly, this is more dramatic than Shark
Tank India Season 2.
Adani Enterprises has had 5 CFOs in 8 years
that strongly implies irregularities.
Similarly for Adani Green Energy.
And Adani Ports
And Adani Power
And Adani Total Gas
And Adani Transmission

Shah Dhandharia, a tiny firm audits Adani

Enterprises and Adani Total Gas.
The partners of the audit firm are 28 years
old and began signing accounts when they
were just 23.
LOL, I was not even on a dating app when
I was 23.
What is
law doing?
Daylight stonewalling
The Indian Directorate of Revenue
Intelligence uncovered the diamond
scandal

But,
The customs,excise and service tax
appellate tribunal stonewalled it
The Indian Directorate of Revenue
Intelligence uncovered the power
equipment scandal

But,
a senior official of the same agency
stonewalled it with the support of the
customs,excise and service tax appellate
tribunal
The ombudsman of Karnataka uncovered
the iron ore scandal

But,
the government stonewalled it.
Justice Hegde resigned citing
government's unwillingness to cooperate.
A leading investigative journalist Paranjoy
Guha Thakurta was jailed for raising
concerns.

A whistleblower was raided in Australia

with his family being stalked at all times.

Adani Group filed a defamation case

against the Economic Times for
uncovering similar stories.

A former trader banned for stock market

manipulation claims that SEBI knows the
whole thing.
$ 120 bn is Gautam Adani's networth.

INR 96,00,00,00,00,000

INR 96 followed by 11 Zeroes

And here I am thinking about my

appraisal cycle.

Such is life.