Rahul Gandhi's 'keep attacking Adani' strategy all over the place

The Indian National Congress has once again spotlighted Adani Group's alleged proximity to the Modi government, with Rahul Gandhi leading the charge in a video post on X (formerly Twitter). Congress Media & Publicity Department head Pawan Khera amplified Gandhi’s message, reviving Hindenburg Research's allegations against SEBI Chief Madhabi Buch, asserting that Buch aligns with the industrialist’s interests rather than maintaining regulatory objectivity. In the video, Gandhi theatrically scrolls through online content, drawing questionable parallels between Israeli firearms and those produced by Adani Defence, ostensibly to hint at Adani's reach into sensitive sectors under Modi's endorsement. Surrounded by an attentive audience, he gestures to the cameraman, subtly accusing the media of bowing to government pressure to avoid covering alleged instances of crony capitalism.

Hindenburg's narrative previously claimed that Buch and her husband held shares in a Mauritian fund, which also included shares held by Vinod Adani, Gautam Adani's brother. This discovery was deemed by Hindenburg as a conflict of interest for Buch's role as SEBI chair. However, it raises an obvious question: could the Buch family have reasonably known about other shareholders' backgrounds, particularly in complex offshore structures where investors typically lack visibility into others’ identities? The assertion, hence, seems tenuous — linking investments by indirect connections is far from evidence of collusion or influence. Nevertheless, the INC has leveraged the Hindenburg narrative to bolster its broader claim of regulatory capture by industrial interests.

Opposition's Adani sarkars

Adding to the contradictions in Congress’s rhetoric is Adani’s history of partnerships across party lines, not just with BJP-ruled states but also Congress-led ones. For instance, under Congress’s Ashok Gehlot in Rajasthan and the late Oommen Chandy in Kerala, Adani secured several projects. Telangana’s previous Bharat Rashtra Samithi (BRS) government engaged Adani too and under the benign gaze of Congress's Revanth Reddy, the Adani Foundation pledged Rs 100 crore for a skills university to boost youth employment opportunities. Critics within the BJP and BRS have highlighted this inconsistency, questioning Congress’s polarized narrative against Adani while it collaborates with him when politically convenient.

Is SEBI protecting Adani?

Meanwhile, SEBI, under Buch's leadership, has continued its oversight of Adani’s companies, debunking Congress’s claim of a compromised regulator. On multiple occasions, SEBI has issued show-cause notices to various Adani entities, including Adani Power. In the latest instance, Adani Power was cited for misclassifying promoter shareholding within the public category. The news created a ripple in the stock market, causing a 3.5% dip in Adani Power’s stock price after a reported 50% drop in consolidated net profit to Rs 3,298 crore for the September quarter of 2024.

These notices underscore SEBI's independence, as do the actions against other Adani firms. Following probes into Adani Energy Solutions, SEBI issued three show-cause notices to Adani Power during the September quarter, demonstrating that regulatory compliance remains a priority, irrespective of the promoter’s political alliances. The Congress’s portrayal of SEBI as subdued appears increasingly misaligned with these actions.

Is the media 'godi'?

A famous journalist coined the term "Godi Media" to insinuate that India's media today is a lapdog of the current regime. Let's examine the accusation in the light of Gandhi's grouse that no respectable media house sees a scam in Adani Defence. If anybody is wondering why the mainstream media is not taking Rahul Gandhi's allegations seriously or even otherwise going after Prime Minister Narendra Modi like the downright negative coverage of the Congress-led UPA government in its last three years, one demonstrative example from the aforementioned video on X will suffice.

Gandhi says — and Khera adds his chorus to the allegation — that Adani Defence has been pasting its labels on small Israeli firearms. Wouldn't that be front-page news in newspapers and prime-time news on television? It would only if it were true.

Adani Defence has been manufacturing these guns in a joint venture with Israel Weapon Industries (IWI) in India. Just as the Russian Admiral Gorshkov became INS Vikramaditya under the UPA rule and the Russian T-90 became India's main battle tank Arjun under previous Congress governments, the Israeli gun Tavor has been renamed as Abhay in India; Galil is Achook here; Negev is Prahar and Dan is Lakshya.

Need one say more to understand why Gandhi's ploy of harping on a Modi-Adani 'nexus' does not stick and no media house is impressed?

Market keeps rewarding Adani nevertheless

On the business front, Adani’s companies have consistently shown resilience. Despite regulatory probes, Adani Enterprises recently reported a record-breaking 664% year-on-year increase in consolidated net profit for the September quarter, rising from Rs 228 crore to Rs 1,742 crore. Such robust financial performance across sectors — from energy to logistics — illustrates the market’s confidence in Adani’s ventures, disregarding political criticism.

Adani Ports and Special Economic Zone (APSEZ) reported a consolidated net profit increase of 39.86%, reaching Rs 2,445 crore, alongside a 6.32% rise in revenue from operations, which amounted to Rs 7,067.02 crore for the second quarter of FY25 compared to the same period in FY24.

Profit before exceptional items and tax rose by 16.51% year-on-year (YoY), totalling Rs 2,936.94 crore for the quarter ending on 30 September 2024. The company also noted an exceptional loss of Rs 51.77 crore in Q2 FY25.

The company's EBITDA, excluding foreign exchange impacts, surged by 13%, reaching Rs 4,369 crore in the September 2024 quarter, compared to Rs 3,880 crore in Q2 FY24.

Domestic ports contributed Rs 4,089 crore to EBITDA, while the logistics segment added Rs 156 crore. The company highlighted that with a 70% EBITDA margin from domestic ports, APSEZ ranks among the most profitable port operators worldwide.

The group’s expansion is similarly evident overseas. Adani Airport Holdings Limited (AAHL), a subsidiary of Adani Enterprises, has recently established Celeritas International FZCO in the UAE to further its global footprint. In India, Adani has pursued expansion in diverse sectors, most recently with its acquisition of Orient Cement, a strategic move that bolsters its goal of reaching 140 million tonnes per annum (MTPA) in cement production capacity by 2028.

This dual reality—the Congress's vehement attacks and Adani's steady ascent—highlights a complex narrative. The inconsistency of Congress’s stance, partnering with Adani in some states while decrying his influence at the Centre, raises questions about the integrity of its arguments. Moreover, SEBI’s continued scrutiny under Buch dispels doubts about regulatory partiality, suggesting that Gandhi’s allegations may serve more as political positioning than substantive critique.

The Congress’s revival of the Adani issue appears as much an effort to raise questions about Modi’s governance as it is about corporate ethics. However, with SEBI’s active oversight and Adani’s growing footprint in both domestic and international markets, the attack on the business group seems to have a limited impact on its growth trajectory. Adani's success, combined with Congress's selective narrative, underscores a broader debate on cronyism and transparency. Ultimately, these dynamics reveal that public and regulatory confidence often hinges more on demonstrable actions than on political rhetoric.