A serious disclosure on the Adani Group’s alleged unethical business practises has had an significant impact on the stock market. Over Rs 1 lakh crore in investor money was lost on Wednesday as a result of this development. Due to claims in the Hindenburg report, the Adani Group companies’ shares came under tremendous selling pressure during Friday’s second trading session and fell up to 20%. Senior politician Subramanian Swamy has taken a dig at the Central Government in the interim and questioned its intent.
Adani Group stock crashes 20% as a result of the Hindenburg Report, wiping off investor wealth by Rs 1 Lakh Crore
All 10 Adani companies were trading in red zone, but Adani Total Gas shares were the most hit, losing up to 19.6% of their market capitalization and falling as low as Rs 2,961.55 on the day.
Adani Transmission NSE -19.09% and Adani Green Energy NSE -19.43% shares were both trading 16% and 13% lower, respectively, at Rs 2,114.75 and Rs 1,613.65, respectively. The shares of Adani Enterprises, the parent firm of the Adani Group, which today announced the start of its Rs 20,000 crore FPO, fell 3% to Rs 3,282.
At Rs 248,05, Adani Power stock crossed the 5% lower circuit limit. Also hitting 5% lower circuits at Rs 517.30 and Rs 256.35, respectively, were Adani Wilmar and NDTV.
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Adani Group threatens Hindenburg Research with remedial and punitive action in both Indian and US courts
The company located in Ahmedabad, which is headed by Gautam Adani, has vowed to take corrective and punitive action against American short-seller Hindenburg Research in both US and Indian courts.
Hindenburg report published to sabotage FPO (Follow-on Public Offer)
it is deeply troubled by this deliberate and careless attempt by a foreign entity to mislead the investor community and the general public, undermine the goodwill and reputation of the Adani Group and its leaders, and sabotage the FPO (Follow-on Public Offer) from Adani Enterprises. The company described Hindenburg’s report as maliciously mischievous and unresearched.
The influence of the report has been blamed for some of the selling that has occurred in the last two days on the Indian equity market. The whistleblower’s report’s warnings about debt-related worries have put pressure on banking equities as well.
Although the overall exposure for domestic public and private sector lenders is well below manageable bounds with proper ring fencing, global broking and research firm CLSA said it sees no significant negative risk to Indian banks from Adani group debt.
CLSA Analyst Adarsh Parasrampuria states,
“The ballpark exposure of private banks is 0.3% of FY24 loans and 1.5% of FY24 networth. For PSU banks, the exposure is 0.7% of FY24 loans and 6% of FY24 networth,”
The top five Adani group companies, Adani Enterprises, Adani Ports, Adani Power, Adani Green, and Adani Transmission, have a combined debt of Rs 2.1 trillion, according to a team of analysts at CLSA.
Hindenburg analysts raise issues related to accounting frauds, stock manipulation issues and other corporate governance issues
Analysts at Hindenburg have brought up difficulties with stock manipulation, accounting fraud, and other aspects of corporate governance in their research
“Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its 7 key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations,”
Nate Anderson formed an investment research company Hinderburg in 2017, and using US-traded bonds and non-Indian-traded derivative instruments, the company has also taken a short position in the Adani Group Companies.
Subramanian Swamy takes pot shots at Adani Group
In the meantime , senior politician Subramanian Swamy has taken a dig at the Adani group and Central Government through his Tweets
Swamy has raised questions on the ethical business practices of Adani Group and has asked whether Central Government will be tolerating this development.
Further, Swamy has taken a pot shot at Gautam Adani and has stated this in his Tweet:
“Trapeze Artist Adani now owes Rs 4.5 lakh crore as NPA to banks. Correct me if I am wrong. Yet his wealth is doubling every two years since 2016. Why can’t he repay the banks? May be like with the six airports he has bought he might soon buy all the banks he owes money.”
Allegations by Hindenburg reports have impacted consumer sentiments and Adani Group has swung into action.
Also Read: Adani Group: Short Seller Hindenburg will benefit from a slide in Adani shares
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