Adani Group shares fell by 1.54%, Rs 97,000 crore lost due to Hindenburg’s statement

Shares of Adani Enterprises fell 1.54% on Wednesday. Shares of Adani Green Energy, Adani Ports, Adani Power, Adani Total Gas. Adani Transmission and Adani Wilmar by 5% and 9%.
The market capitalization of 10-listed Adani Group shares took a major hit on Wednesday. Because of a report by Hindenburg Research allegation. That the Indian conglomerate was involved in stock manipulation and accounting fraud schemes over the past several decades.

Following which, total market capitalization of the group’s shares fell. From Rs 96,672 cr to Rs 18.23 lakh cr from Rs 19.20 lakh crore on January 24.  

Adani Group said Hindenburg Research published the report without attempting to contact it or check its fact matrix. “This report is a vicious mix of banal, baseless and unbelievable allegations. And selective misinformation that have been tested and dismissed in India’s highest court,” said Jugeshinder Singh, Group CFO of Adani.

stock price track

Shares of Adani Enterprises fell 1.54% to Rs 3,389.85 on 25 January. Adani Green Energy, Adani Ports and Special Economic Zone. Adani Power, Adani Total Gas, Adani Transmission and Adani Wilmar also fell between 5% and 9%. Adani’s recent acquisitions, ACC, Ambuja Cements as well as NDTV, also declined 7.26%, 7.71% and 4.98%, respectively.

Hindenburg Research’s report comes at a special time. Just as Adani Enterprises is set to launch a follow-up public offer of Rs 20,000 crore for subscriptions on Friday.

Market expert Kranthi Bathini, equity strategist at WealthMills Securities, said: “The timing of this report is debatable. The statements made in this report have not been substantiated and are not recent. However, a report that came out around the time the company was raising money raises doubts.”

What future plans?

Bathini advised his existing Adani investors to stay put.

Nikhil Gangil, Founder of Intrinsic Value Equity Advisors, said, “I would stay away from Adani Group stock at current valuations. It’s important to note that Hindenburg is a short seller. Clearly, there is an agenda for such research reports. However, some of the claims made by the report have already been part of the discussion among the investor fraternity.”

FPO: Avoid or Skip?

Adani Enterprises’ Rs 20,000-crore FPO opens for subscription on January 27th. A public offering is the process by which a publicly traded company issues new shares to investors or existing shareholders. FPO is used by companies to diversify their stock base. Individual investors, including high net worth (HNI), held 2.22% stake in Adani Enterprises for the quarter ended September 30, 2022. This publication ends on January 31, 2023.