Why the Adani crisis is likely to leave India’s other conglomerates unscathed

The dramatic fall in the Adani Group company shares following allegations by Hindenburg Research is unlikely to spill over to other Indian conglomerates as they fare well on key business parameters, according to Bloomberg Economics.

Most major companies, including Reliance Industries Ltd. and the Tata Group, scored higher than the ports-to-power conglomerate in a BE analysis of governance, liquidity and leverage conditions at India’s top 17 business houses.

Economists Abhishek Gupta said Adani is an outlier, not representative of India Inc. as a whole. Economists further added that India’s conglomerates do not yet rank among global majors like Apple and Tesla. But neither are they about to collapse in a heap of governance failures.

The embattled Adani Group on Monday attempted to calm the market as a rout in its shares continued, saying its growth plans are intact, business plans are fully funded and it remains confident of delivering returns to shareholders.

Market value of the group's seven listed companies has halved since a January 24 report by US-based short-seller Hindenburg Research alleged that Adani pulled "the largest con in corporate history" using offshore tax havens and stock manipulation.

The Group has denied all allegations, calling them "malicious", "baseless" and a "calculated attack on India". It called Hindenburg the "Madoffs of Manhattan", referring to the late financier and fraudster Bernie Madoff.