Among its allegations were that a relative of Mr Adani used offshore entities to launder money into the group’s listed companies, contributing to their “sky-high valuations” after a surge in stock prices over the past three years.

Hindenburg also questioned what it said were high amounts of leverage in the group’s entities.

Jugeshinder Singh, the group’s chief financial officer, rejected Hindenburg’s claims as “a malicious combination of selective misinformation and stale, baseless and discredited allegations”. The Adani Group said it operated “in compliance with all laws” and said it was weighing “remedial and punitive action” against Hindenburg.

The group also questioned the timing of the report, just as Mr Adani embarks on a $US2.5 billion share offering in India that is due to close next week.

With the Adani Group’s interests spanning from heavy industry to media – and its position as a leading corporate employer and taxpayer – the challenge to the group’s integrity is significant for India Inc and its financial markets, regulators and politicians.

It comes as Mr Adani has embarked on an ambitious international expansion, enlisting global partners and investors to back the group.

Close to Narendra Modi

“Given the size and impact and scale of their investments, this is something that everyone will have their eye on now,” said Amit Tandon, managing director of Institutional Investor Advisory Services, a Mumbai-based proxy advisory firm.

The questions over Mr Adani’s personal integrity resonate all the more because of his long-standing association with Prime Minister Narendra Modi, who hails from the same state of Gujarat.

The tycoon’s ties to Mr Modi have been subject to fierce scrutiny from critics, who accuse the Adani Group of using its powerful position to secure sweetheart deals. In 2019, for example, the group bought all of a batch of six airports being privatised by the government, after rule changes allowed a company with no prior experience to swiftly become one of India’s largest airport groups. One opposition leader called it an “act of brazen cronyism”.

Mr Adani, 60, acknowledges that aligning business interests to government policy has given him a “tailwind”. But he denies impropriety.

Asked in a television interview this month by India Today’s Rajat Sharma about his rapport with Mr Modi, he said that one “cannot take personal help from Modi ji”, using an honorific for the prime minister. In response to a question about bids, he said that “not one business has been secured without bidding”.

The billionaire has presented his life story as that of a self-made man, who made his first money under a government run by the opposition Congress party.

Mr Adani was born in Ahmedabad in 1962 in a middle-class family, with a textile merchant father. He left school aged 16, dropping out without getting a degree, to work in Mumbai.

He dabbled in the diamond trade, returning four years later to Gujarat to run his brother’s plastics factory. He began borrowing based on one business to finance expansion into new ones. Mr Adani developed a port and special economic zone in Mundra, Gujarat, that was to grow into one of India’s largest and a hub of his business empire, with facilities including a coal-to-plastic factory and a copper smelter on site.

Mr Adani has pushed heavily into renewable energy, aligning himself with the government’s ambitious decarbonisation goals, while remaining one of India’s biggest operators of coal-fired power plants.

Last year he launched a successful hostile bid for leading broadcaster NDTV – a move that critics said was ominous for India’s shrinking press freedoms – and then said he aimed to build a “global footprint” for it, giving India an outlet comparable to Al Jazeera.

Hindenburg’s questions now bring more attention to the fundamentals of Mr Adani’s swath of businesses, including the source of the company valuations that have made him one of the world’s richest men.

During the India Today interview, Mr Adani waved away talk of his soaring wealth – “I don’t chase numbers,” he said – and dismissed a question over what would happen if “the Adani bubble bursts”, saddling banks with unpaid debt.

“This balloon will keep flying as long as India is progressing,” he replied.

Financial Times