The turmoil engulfing Gautam Adani's business empire following damning allegations by a US short seller, has not shaken the faith of global investors in India, real estate doyen K P Singh said rubbishing suggestions that banks would have lent to Adani group on instructions from higher-ups.

The punishing stock market sell-off Adani group companies have seen following the January 24 report of Hindenburg Research is a temporary blip concerning just one corporate group and hasn't harmed faith in India as an investment opportunity, he told PTI in an interview.

He, however, felt the Adani group needs to "beef up" capital and cut down debt to continue to remain on the high growth trajectory.

Known for his plain speaking, Singh cited how a Canadian firm had threatened to bring out a report when his retail estate firm DLF was bringing out an IPO one-and-a-half-decade back.

"We said push-off (to the Canadian firm)... do whatever you can ," he said, adding there are "blackmailers" who bring out reports around any big share sale.

The Hindenburg report that alleged accounting fraud and stock manipulation at the Adani group, came just as a Rs 20,000 crore follow-on share sale of the conglomerate's flagship firm Adani Enterprises opened.

"Completely nonsense," he said on the Adani-Hindenburg row impacting India's attractiveness as an investment destination. "India is too big a country today. So this story will die down. Investment will not be hurt." Modi is "a sensible and dynamic person" and "so long as he remains prime minister India will remain an attractive destination, he said.

The apples-to-airport conglomerate has denied all allegations, calling them "malicious", "baseless" and a "calculated attack on India".

The Adani group's listed firm lost about USD 125 billion in market value in three weeks after the report. Some recovery has been seen in the last couple of days.

While the group's rapid expansion - from cement to hydrogen and data centres, has largely been fuelled by debt funding, Singh, who is now chairman emeritus of DLF, said suggestions that banks lent money to the Adani group because of Prime Minister Narendra Modi telling them to do so was rubbish.

"What has the prime minister got to do with it (lending money to a corporate)? No banker, even if the prime minister tells anything, will give money unless it is justified," he said.

"I have no clues about Adani but if somebody thinks today that a call from the prime minister will make bankers give (loan) then they are living in a fool's world. No banker will do this thing." Citing the example of former ICICI Bank chief executive Chanda Kochhar, who was arrested on charges of irregularities in loans to Videocon Group, he asked, "Would any banker do anything which is not according to the regulations? No, they won't." Opposition parties used the Hindenburg report to attack the government, alleging Modi aided the Adani group's rise.

The Prime Minister has not referred to Adani by name since the crisis triggered by the Hindenburg report but earlier this month he told Parliament that the "blessings of 140 crore people in the country are my protective cover and you can't destroy it with lies and abuses".

Singh said Modi need not respond and should continue to do his job.

"So many dogs will bark, he should not respond to it. System will take care. They will go away. He should continue doing what he is doing," he said.

On the troubles facing Adani group, he said entrepreneurs are risk takers but it's always smart to strike a balance between equity and debt.

Adani's rival Mukesh Ambani has done the smart thing of balancing debt by bringing in equity investors across businesses.

"Every businessman goes through this thing. In your zest for growth, you get debt. (But) Balance debt with equity. And grow again," he said, adding Adani was trying to do that through the FPO of Adani Enterprises.

Adani group has maintained that its debt of Rs 1.96 lakh crore as on September 2022 was balanced with assets it has and the revenues all the businesses are generating.

"Always have a healthy balance between equity and debt. At the moment Adani seems to have heavy debt. So I wish him good luck, I don't know but eventually, he has to beef up his capital," Singh said.

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