With about $140 billion in market value of its group companies being wiped off in five weeks, Adani Group needs a third-party audit of accounts to allay fears of shareholders even though the concern over group debt may be "overstated", a 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," SES said in a report.

"An independent third party confirmation of its accounts would go a long way in establishing and restoring credibility." The apples-to-airport conglomerate has been rocked by a damning report by US short-seller Hindenburg Research which alleged "brazen stock manipulation and accounting fraud" and use of a number of offshore shell companies to inflate stock prices.

The group has denied allegations, calling them "malicious", "baseless" and a "calculated attack on India". But this did not stop a sell-off in shares of 10 listed group companies, with cumulative loss in market value at over $140 billion. Most stocks were in green on Tuesday.

Stakeholders Empowerment Services (SES), a corporate governance research and proxy advisory firm, said in its view "group debt concept concern may be overstated since each business (of the group) appears to be independently resilient to muster required cashflows to service debt." The group had a gross debt of Rs 2.26 lakh crore as of September 30, according to a stock exchange filing. Total cash and cash equivalents was Rs 31,646 crore. It faces a repayment obligation of Rs 17,166 crore between January 2023 and March 2024.

"With the exception that reputation loss will impact all companies, though in unequal measure on a case by case basis," SES said listing out financial details of each of the group companies.

In most cases, it said they had "adequate cash flow to service debts" and "banks have comfortable asset to debt ratio." Only Adani Transmission has "high" debt-equity ratio but given the fixed return promised from the business of transmitting electricity on power lines, it is not "any cause of worry." Adani Green, the renewable firm of the group, is "the most leveraged company" but the company "should not face any problem" in servicing debt.

SES said unless the group companies are interconnected in terms of shareholding, as also through intercompany transactions in form of loans/advances, revenue dependence as also cross holding, group concept should not be applied as far as debt is concerned.

On concerns of pledge of promoter shares, SES said the pledge by any Adani company is 25 per cent of promoter holding, giving a margin of safety of about four times.

On allegations of money laundering via obscured beneficial owners, SES said this was a job for regulators, law enforcement agencies that the government has to decide.

"SES can only say it is a grey area and unless made crystal clear either by Adanis themselves or the government agencies, this governance overhang or negative perception will remain," the report said.

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