Mallika Dureja
The market capitalization of the ten listed Adani Group stocks went down on Wednesday after Hindenburg Research released a report saying that the Indian conglomerate had been manipulating stock prices and committing accounting fraud over the last few decades. After the accusations, the market value of the group’s stocks fell by Rs 96,672 crore, from Rs 19.20 lakh crore on January 24 to Rs 18.23 lakh crore.
In a filing with the government, Group said that Hindenburg Research published the report without contacting them or checking the facts. “The report is a malicious mix of selectively false information and old, unfounded, and discredited claims that India’s highest courts have already tested and found to be false,” said Jugeshinder Singh, Group CFO of Adani.
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Share price movement
On January 25, shares of Adani Enterprises fell 1.54% to Rs 3,389.85. Adani Green Energy, Adani Ports and Special Economic Zone, Adani Power, Adani Total Gas, Adani Transmission, and Adani Wilmar all dropped between 5% and 9%. Recent companies that Adani bought, such as ACC, Ambuja Cements, and NDTV, also went down by 7.26%, 7.71%, and 4.988%, respectively.
Hindenburg Research’s report came out at the same time that Adani Enterprises was getting ready to start its Rs 20,000-crore follow-on public offer on Friday.
Kranthi Bathini, Equity Strategist at WealthMills Securities, who keeps an eye on the market, said, “The timing of this report is questionable. The things in this report aren’t proven, and none of them have happened recently. However, the fact that this report came out around the same time that the company was trying to raise money makes people suspicious.”
What did the Hindenburg report say about adani?
The Hindenburg Research report, which came out on January 24, 2023, said that Adani Group had been “involved for decades in a brazen stock manipulation and accounting fraud scheme.”
Hindenburg said that the results of its “two-year investigations” showed that companies owned by the Gautam conglomerate “have taken on substantial debt, including pledging shares of their inflated stock for loans, putting the whole group on a precarious financial footing.”
The report also said that the seven key listed companies of Group have a “85 percent downside based on fundamentals alone” because their prices are so high. The report also said that the group had committed fraud and manipulated the stock market.
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Adani Group – How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate Historyhttps://t.co/JkZFt60V7f
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— Hindenburg Research (@HindenburgRes) January 25, 2023
How Adani Group responded?
Hindenburg Research made claims in its report, and Adani Group put out a statement to deny them. The group also didn’t like that the report came out just days before the Adani Enterprises FPO.
The Group CFO Jugeshinder Singh said, “We are shocked that Hindenburg Research published a report on January 24, 2023, without trying to contact us or check the fact matrix.”
“The report is a malicious mix of selectively false information and old, false, and discredited claims that India’s highest courts have tested and found to be false,” he said.
What’s next
Bathini told people who had already invested to keep their positions. Nikhil Gangil, who started Intrinsic Value Equity Advisors, said, “At current prices, I wouldn’t buy Group stocks. Hindenburg is a short-seller, which is important to know. For a research report, it’s clear that it has a plan. But some of the things the report said were true were already being talked about among investors.”
