Juicy Fees for Wall Street Banks Behind Adani Group’s House of Cards

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The Adani Group’s dealings with Wall Street banks have become the latest scandal to rock the business world. With their voracious appetite for debt, I have accused the Indian conglomerate of perpetrating ‘the largest con in corporate history.’

Last summer, after Adani Group completed its $10.5 billion leveraged buyout of a cement business from Swiss firm Holcim, Gautam Adani, the conglomerate’s mastermind and chairman, was widely praised for his intelligent financial skills.

India’s Most Powerful Conglomerates

The Adani Group is one of India’s most powerful conglomerates, with a history dating back to the 1980s when it began as a commodities trading firm. Over the years, Adani Group has proliferated, becoming a $23 billion (annual sales) enterprise with seven publicly-traded companies in India’s energy, industrial, and logistics businesses.

Between 2015 and 2021, six different Adani Group companies raised an estimated $10 billion through U.S-dollar-denominated bond sales that U.S. and European investment banks underwrote.

These bonds — which are corporate debt securities — had allowed the Group to finance its rapid expansion in India and overseas during a period when international capital markets were experiencing turbulent volatility due to a global economic downturn.

The Adani Group’s ability to raise significant capital has impressed shareholders, analysts, and bankers. However, what began as a series of seemingly successful investments has now come under scrutiny as questions arise about the extent of profits made by Wall Street firms at the expense of investors.

An analysis conducted by Bloomberg recently revealed that “Between 2015 and 2019 alone, investment banks earned more than $350 million in fees from Adani Group bond issuances–a figure far exceeding what is typical for similar transactions with other corporations around the world.”

The Adani Group has since defended itself against allegations that it was involved in any wrongdoing or irresponsible borrowing practices; however, these accusations should serve as an important reminder for all investors about the importance of thoroughly researching companies before investing their funds.

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