Why Hindenburg's report on Adani Group is a blessing in disguise for truckers in Himachal

US-based short-seller Hindenburg's damaging report has wiped off billions of dollars in the market cap of Gautam Adani-led Adani Group but it has saved the livelihood of thousands of truckers transporting cement from Adani's factories in Himachal Pradesh, Reuters reported on Thursday. Last year, the Adani Group bought ACC and Ambuja Cements from Swiss giant Holcim and became India's second-largest cement manufacturer. However, the group on December 15 decided to shut two plants - ACC plant at Barmana in Bilaspur and Ambuja plant at Darlaghat in Solan - in Himachal as it felt the truckers were charging higher freight rates.

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The truckers were charging Rs 11.41 per quintal per km at Barmana in Bilaspur and Rs 10.58 per km per quintal at Darlaghat but the group wanted it to be slashed to Rs 6 per quintal per km. The closure of plants affected about 7,000 truckers as they sat on strike for weeks negotiating with the company. However, this Monday, the company said it had resolved the issue with a 10-12 per cent reduction in rates.

Now, truckers believe that the group resolved the crisis as it was stung by the damaging report by Hindenburg, which accused the group of stock manipulation and fraud through a wave of shell firms. The report caused massive erosion of wealth as the shares of group companies plunged, shaking the trust of investors in the highly leveraged group.  

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Ram Krishan Sharma, one of the lead negotiators for protesting truckers, told the international news agency that the report "played a crucial role in our battle against India's biggest business group, helped mobilize truckers and gain political support".

According to the report, the negotiators from the Adani Group had refused to budge for weeks. "So Hindenburg's report, some truckers believe, was godsent."

A source familiar with Adani's negotiation said the embattled group had been under pressure following what it called a 'negative campaign' after the Hindenburg report, and the settlement to reopen plants is a relief, the report said.

Following the short-sellers report, Gautam Adani, who is considered close to Prime Minister Narendra Modi, faced intense attack by the opposition leaders including former Congress chief Rahul Gandhi, whose party is in power in Himachal Pradesh. And it was at the same time, about two weeks after the report, Himachal tax officials raided a warehouse of Adani Wilmar, an FMCG company of Adani Group.

Now that the company has reached an agreement with truckers it will help the group signal it can resolve commercial matters in states ruled by the opposition, the source told Reuters. The truckers have accepted a small cut in freight rates as Adani has agreed to pay 9.3-10.58 rupees per km per tonne.

Reuters reported that days before the Hindenburg report came out, many truckers had visited a revered temple in Darlaghat which overlooks one of Adani's cement plants, and offered a traditional sweet to the deity as they sought to resolve the dispute. After resolution, they again organised prayers at the temple this week.

During the negotiations, the truckers created WhatsApp groups to coordinate efforts. And when the Hindenburg report came in, they shared its impact on Adani companies and stock prices to further drum up support. Bantu Shukla, a protest leader, said the truckers felt their deity had accepted their prayers when they saw the fall in the share prices of Adani companies. "The Hindenburg report was a gift that saved our businesses."