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Shares of the Adani group dropped by up to 17% in early trading on Monday, following fresh allegations from the US-based short seller firm Hindenburg Research.
US-based short seller firm Hindenburg Research on Saturday claimed that whistleblower documents show Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch had a stake in the obscure offshore entities used in the "Adani money siphoning scandal"
In response to these allegations, the Adani Group has firmly denied any wrongdoing, calling the claims “malicious,” “mischievous,” and “manipulative.”
Sebi Chief Madhabi Buch and her husband have labelled the allegations as ‘baseless’ and an attempt at ‘character assassination.’
The Adani group’s stocks saw a sharp decline in the wake of these claims. Adani Power plunged by 10.94%, hitting a low of Rs 619 on the Bombay Stock Exchange (BSE). Adani Enterprises fell by 5.27%, reaching a low of Rs 3,018.55.
Adani Energy Solutions experienced the largest drop in early trade, plummeting 17.06% to Rs 915.70 before partially recovering. Adani Green Energy dropped 6.96% to Rs 1,656.05.
Adani Total Gas tumbled 13.39% to Rs 753 but later recovered to Rs 829.85, down 4.55%. Other Adani stocks also fell, with Adani Wilmar decreasing by 6.49% to Rs 360 and Adani Ports falling 4.95% to Rs 1,457.35. ACC, Ambuja Cements, and NDTV saw drops of 2-3%.
Hindenburg's report also highlighted connections between the IPE Plus Fund, where Sebi Chairperson Madhabi Buch had investments, and the Adani group.
Anil Ahuja, the Founder and Chief Investment Officer of the IPE Plus Fund, was noted to have previously served as a director of Adani Enterprises and Adani Power.
In response, the Adani Group said that Ahuja’s role as a director was 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.
The group also clarified that Ahuja’s departure from the fund in 2018 led to the redemption of their investment, and affirmed that the fund did not invest in Adani group securities.
Vinit Bolinjkar from Ventura Securities said that the latest Hindenburg allegations are not particularly serious. He described them as "recycling of the same thing," suggesting that the claims are being presented anew without substantial new evidence. Bolinjkar believes the report might have a temporary impact on Adani stocks, but he expects a recovery soon.
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, also sees the current market reaction as likely short-lived.
Bathini noted that while the report may cause a temporary decline, he believes that if the allegations do not impact the Adani group’s earnings significantly, the stock prices are expected to recover. He mentioned that stock prices are generally driven by earnings, and he does not foresee long-term damage to the Adani group’s financial performance.
