The shares of Adani Group companies fell up to 7% in early trading on Monday losing around $19 billion in market capitalisation following a series of accusations made by Hinderburg Research. The companies recover some of the losses later on in the day.
The short-seller claimed the chairperson of the Securities and Exchange Board of India (SEBI) has links to offshore funds used by Adani. In the group’s view, this conflict of interest kept the regulator from investigating Hindenburg Research’s claims against Adani Group,
The accusation resulted in shares of Adani Enterprises Ltd., the group’s flagship, sliding as much as 5.3% per cent in early Mumbai trading on Monday, while Adani Energy Solutions Ltd. plunged as much as 17%. Overall, all of the conglomerate’s 10 stocks dropped during the session. The NSE Nifty 50 Index, India’s equity benchmark, fell 0.5%.
As of the time of writing (13:13 GST), the majority of Adani stocks continue to trade negative, with Adani Total Gas falling 3.72% and Adani Energy Solutions falling 3.34%. The only two stocks trading in positive territory are Adani Green Energy at 1.13% and Ambuja Cements at 1.31%. The NDTV is down 2.20%.
The market behaviour constitutes a reaction to the accusations published by Hindenburg Research a report published Saturday. In the document, the group claimed Madhabi Puri Buch, the chairperson of India’s market regulator and her husband, Dhaval Buch, invested in offshore entities that were allegedly part of a fund structure in which Vinod Adani, brother of Gautam Adani, the group’s billionaire founder, had also invested.
Adani has denied the accusations, describing them as “malicious, mischievous and manipulative selections of publicly available information”.
“We completely reject these allegations against the Adani Group which are a recycling of discredited claims that have been thoroughly investigated, proven to be baseless and already dismissed by the Hon’ble Supreme Court in March 2023,” the company said in a statement published on its website.
“The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned in this calculated deliberate effort to malign our standing,” it added.
The SEBI has asked investors to remain calm and exercise due diligence before reacting to the news.
Hindenburg Group has previously claimed Adani Group had made improper use of tax havens and stock manipulation. At the time, the accusations wiped out more than $150 billion in Adani Group’s combined market value at its worst and led India’s top court to order a SEBI probe into the group. However, the regulator is yet to make a case against the Adani Group.
