Shares of the Adani Group experienced a significant downturn, plunging by as much as 17% in early trading on Monday. This sharp decline followed new allegations from Hindenburg Research, a US-based short seller firm, which further rattled investor confidence in the conglomerate.
Hindenburg Research’s latest claims made public on Saturday, revolve around whistleblower documents that allegedly link Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch to obscure offshore entities involved in what has been dubbed the “Adani money siphoning scandal.” The allegations, suggesting that Buch had a stake in these entities, have been met with firm denial from both Buch and her husband. They have labeled the accusations as “baseless” and an attempt at “character assassination.”
The Adani Group, one of India’s largest multinational conglomerates, saw its stocks take a hit across various sectors. The group’s flagship company, Adani Enterprises, fell by 5.27%, touching a low of Rs 3,018.55. Adani Power was not spared either, plummeting by 10.94% to a low of Rs 619 on the Bombay Stock Exchange (BSE).
Adani Energy Solutions bore the brunt of the market’s reaction, witnessing a dramatic 17.06% drop to Rs 915.70, before partially recovering later in the session. Similarly, Adani Green Energy saw its shares decrease by 6.96% to Rs 1,656.05. Adani Total Gas also suffered a steep decline, initially dropping 13.39% to Rs 753, although it later regained some ground, ending the session down 4.55% at Rs 829.85.
Other stocks within the Adani Group were also negatively impacted. Adani Wilmar recorded a 6.49% drop to Rs 360, while Adani Ports fell by 4.95% to Rs 1,457.35. Even ACC, Ambuja Cements, and NDTV, which are part of the broader Adani portfolio, saw their shares dip by 2-3%.
The report by Hindenburg also drew attention to connections between the IPE Plus Fund, where SEBI Chairperson Madhabi Buch had investments, and the Adani Group. It was revealed that Anil Ahuja, the Founder and Chief Investment Officer of the IPE Plus Fund, had previously served as a director for both Adani Enterprises and Adani Power. This revelation has added to the scrutiny surrounding the financial dealings within the Adani Group.
However, the Adani Group has come forward to clarify the situation. According to their statement, Ahuja’s role as a director occurred during a period when he was a nominee director representing the 3i investment fund, and there was no direct commercial relationship with the individuals mentioned in Hindenburg’s report. Furthermore, the group emphasized that Ahuja’s departure from the fund in 2018 resulted in the redemption of their investment, and the fund did not invest in Adani Group securities.
Amidst the ongoing turbulence, some market experts have weighed in on the potential impact of Hindenburg’s allegations. Vinit Bolinjkar, from Ventura Securities, downplayed the seriousness of the claims, describing them as a “recycling of the same thing” and suggesting that the allegations are being rehashed without substantial new evidence. Bolinjkar believes that while the report might have a temporary impact on Adani Group stocks, a recovery is likely on the horizon.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, shared a similar sentiment. Bathini noted that while the report might cause a short-term decline, the long-term impact on Adani Group’s financial performance is expected to be minimal, provided the allegations do not significantly affect the group’s earnings. He emphasized that stock prices are typically driven by earnings, and as long as the group’s financial results remain strong, a recovery in stock prices is anticipated.
The recent plunge in Adani Group stocks, triggered by Hindenburg Research’s latest allegations, has undoubtedly caused ripples in the market. However, with industry experts predicting a potential recovery, investors might consider this downturn as a temporary setback. As the situation unfolds, staying informed and closely monitoring the market movements will be crucial for those invested in Adani Group stocks. For more updates and expert analysis, subscribe to our newsletter and stay ahead in the market.
