Proxy advisory services firm Stakeholders Empowerment Services (SES) said the Adani group's debt concern may be overstated since each business appears independently resilient to muster required cash flows to service debt.

However, the reputation loss caused by Hindenburg Research's 106-page report on Adani Group will impact all companies, though in unequal measure on a case by case basis, SES said in its note titled "Adani Group: A Fact Check".

An independent third-party confirmation of its accounts would go a long way in establishing and restoring credibility, the proxy advisory firm said. "In addition to the response to Hindenburg, who is not a stakeholder, Adani must care for its stakeholders (investors and lenders) and address all areas of concern."

On January 24, U.S. short seller Hindenburg Research accused the Gautam Adani-led conglomerate of "pulling the largest con in corporate history". The conglomerate called the allegations as "malicious", "baseless" and a "calculated attack on India".

On Adani Ports and Special Economic Zone, SES said the ports operator has adequate cash flow to service debts and banks have comfortable asset-to-debt ratio. The proxy advisory firm said that cash flows of Adani Power will improve once it is able to realise all disputed amounts of receivables which are already adjudicated in its favour by various courts. SES further said that FMCG company Adani Wilmar is debt free.

Adani Total Gas, which has witnessed over 80% decline in market capitalisation since January 24, has very low debt, according to SES. "Current cash and next 12 months cash generation will repay entire debt," it said.

Adani Green Energy is the most leveraged company of the Adani group, according to SES. "Since green energy finance is becoming easy to obtain and liberal repayment terms, the company should not face any problem. However, with recent negative news, it appears that the open arms of lenders may not remain that open. It will take some time for arms to open again. This may put slight pressure on expansion plan," said the proxy advisory firm.

As per SES, given the negative environment, capital raising could be an issue or cost would increase for Adani Enterprises, the group's flagship company which also acts as an incubator for other businesses.

Meanwhile, valuation guru Aswath Damodaran believes that the Adani Group collectively carries about three times as much debt as it should, making the group over-leveraged. "But note that this is bad business practice, not a con," Damodaran said in a blog post.

Shares of Adani Group's listed companies extended gains on Wednesday. Adani Enterprises jumped 13% to ₹1,534 apiece on the National Stock Exchange (NSE). Shares of Adani Wilmar, Adani Power and Adani Green were locked in their 5% upper circuit. Adani Total Gas reversed its declining trend and rose 4% in intraday trade.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.