In summary,
- Adani shares experienced a decline of as much as 17% following allegations made by Hindenburg.
- The stocks of Adani faced considerable reductions on the Bombay Stock Exchange.
- The Hindenburg report has associated the Chair of the Securities and Exchange Board of India with Adani-related entities.
Shares of the Adani group experienced a decline of up to 17% during early trading on Monday, following new allegations made by the US-based short-selling firm Hindenburg Research.
On Saturday, Hindenburg Research asserted that whistleblower documents indicate that Madhabi Puri Buch, the Chairperson of the Securities and Exchange Board of India (Sebi), held a stake in obscure offshore entities implicated in the so-called “Adani money siphoning scandal.” In response to these accusations, the Adani Group has categorically denied any misconduct, describing the allegations as “malicious,” “mischievous,” and “manipulative.”
Madhabi Buch and her husband have dismissed the allegations as ‘baseless’ and an effort at ‘character assassination.’
The stock prices of the Adani group plummeted sharply in light of these claims. Adani Power fell by 10.94%, reaching a low of Rs 619 on the Bombay Stock Exchange (BSE). Adani Enterprises saw a decrease of 5.27%, hitting a low of Rs 3,018.55.
Adani Energy Solutions recorded the most significant drop in early trading, plummeting 17.06% to Rs 915.70 before experiencing a partial recovery. Adani Green Energy declined by 6.96% to Rs 1,656.05.
Adani Total Gas fell by 13.39% to Rs 753 but later rebounded to Rs 829.85, reflecting a decrease of 4.55%. Other Adani stocks also faced declines, with Adani Wilmar dropping 6.49% to Rs 360 and Adani Ports decreasing by 4.95% to Rs 1,457.35. ACC, Ambuja Cements, and NDTV reported declines ranging from 2% to 3%.
Hindenburg’s report further emphasized connections between the IPE Plus Fund, in which Sebi Chairperson Madhabi Buch had investments, and the Adani group.
Anil Ahuja, the Founder and Chief Investment Officer of the IPE Plus Fund, was noted to have previously held a directorial position at Adani Enterprises and Adani Power.
In response, the Adani Group clarified that Ahuja’s directorship occurred during a time when he served as a nominee director representing the 3i investment fund, asserting that there was no direct commercial relationship with the individuals mentioned.
The group further clarified that Ahuja’s exit from the fund in 2018 resulted in the redemption of their investment, emphasizing that the fund did not allocate resources to Adani group securities.
Vinit Bolinjkar of Ventura Securities commented that the recent allegations from Hindenburg are not particularly grave. He characterized them as a “recycling of the same thing,” indicating that the assertions are being reintroduced without any significant new evidence. Bolinjkar anticipates that the report may have a fleeting effect on Adani stocks, but he predicts a swift recovery.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, shares the view that the current market response is likely to be temporary.
Bathini observed that while the report may induce a short-term decline, he believes that if the allegations do not substantially affect the Adani group’s earnings, stock prices are likely to rebound. He pointed out that stock prices are primarily influenced by earnings, and he does not expect any long-term harm to the Adani group’s financial standing.
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