Adani Group stocks tumble by up to 17% amid fresh allegations from Hindenburg research
PTC News Desk: As a result of new accusations made by the US-based short seller company Hindenburg Research, shares of the Adani group fell as much as 17 per cent in early trade on Monday.
On Saturday, the US-based short seller company Hindenburg Research asserted that papers leaked by sources demonstrated that Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India (Sebi), had a financial interest in the unidentified offshore companies implicated in the "Adani money siphoning scandal."
The Adani Group has categorically denied any misconduct in response to these accusations, labelling them as "malicious," "mischievous," and "manipulative."
The accusations have been described as "baseless" and an attempt at "character assassination" by Sebi Chief Madhabi Buch and her spouse.
The claims caused a dramatic decrease in the stocks of the Adani group. Adani Power fell 10.94%, settling on the Bombay Stock Exchange (BSE) at Rs 619. Adani Enterprises dropped to a low of Rs 3,018.55, a loss of 5.27%. The biggest decliner in early trading was Adani Energy Solutions, which fell 17.06% to Rs 915.70 before making a minor recovery. Adani Green Energy fell Rs 1,656.05., or 6.96%.
Adani Total Gas fell 13.39% to Rs 753, although it eventually rose to Rs 829.85, a decrease of 4.55%. Adani Wilmar dropped 6.49% to Rs 360 and Adani Ports down 4.95% to Rs 1,457.35, among other Adani stocks that also experienced a decline. There were 2-3% declines in ACC, Ambuja Cements, and NDTV.
Hindenburg's study also emphasized links between the Adani group and the IPE Plus Fund, which was owned by Madhabi Buch, the chairperson of Sebi. It was mentioned that Adani Power and Adani Enterprises directors Anil Ahuja, the founder and chief investment officer of the IPE Plus Fund, had previously held these positions.
The Adani Group responded by stating that Ahuja served as a nominee director for the 3i investment fund during his tenure as a director and that there was no business connection between Ahuja and the persons listed. The group also confirmed that the fund did not purchase securities from the Adani group and stated that Ahuja's exit from the fund in 2018 caused their investment to be redeemed.
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According to Ventura Securities' Vinit Bolinjkar, the most recent claims against Hindenburg are not that serious. He called them "recycling of the same thing," implying that there isn't much new evidence to support the assertions being made. Bolinjkar anticipates a quick rebound in Adani stock prices, although he thinks the revelation may have a short-term effect.
Director of Equity Strategy at WealthMills Securities Kranthi Bathini concurs that the present market reaction is probably transitory.
Although Bathini pointed out that the report might result in a brief drop, he thinks that the stock prices will rise if the accusations have little effect on the Adani group's earnings. He stated that earnings typically influence stock prices and that he does not anticipate long-term harm to the Adani group's financial performance.
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- With inputs from agencies
