Adani stocks tumble as impact of Hindenburg report grows

Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port in Israel on January 31, 2023.
| Photo Credit: Reuters

A day after the ₹20,000 crore follow-on public offer (FPO) of Adani Enterprises sailed through on Tuesday, shares of the Adani Group’s 10 listed firms plunged on Wednesday. The flagship Adani Enterprises crashed more than 25%, as the crisis triggered by the Hindenburg Research report seems to be worsening. 

The ₹20,000 crore FPO from Adani Enterprises was fully subscribed after the support of high-net-worth individuals (HNIs) and institutional investors. The offer had evoked poor response from retail investors and even employees of the group. 

In a related development, global brokerage firm Credit Suisse, on Wednesday, assigned a zero-lending value for the bonds sold by three group firms — Adani Ports and SEZ, Adani Green Energy and Adani Electricity Mumbai.

In just five trading sessions since the U.S. short-seller Hindenburg Research published its exhaustive report alleging accounting fraud and stock manipulation by the Gujarat-based Adani Group, its shares in 10 listed firms have seen massive losses. 

The combined market value of the group shares has fallen by more than 35% in just five trading sessions, wiping out an estimated ₹7.4 lakh crore from the combined market capitalisation of the group. 

“There appears no end to the crisis as of now,” a top stock broker from Mumbai told The Hindu. 

Wednesday’s rout saw its cement stocks with ACC fall by 6.2 % and Ambuja Cement down by as much as 16.7% while the recently-acquired NDTV’s stock declined by around 5%. The group had acquired ACC and Ambuja from Switzerland’s Holcim Group last year. 

Editorial | Warning bells: On the Adani saga

So far there has been no statement either from the government of India or the market regulator SEBI about the allegations regarding corporate governance issues in the group. 

However, the Adani Group in a strong rebuttal on January 26, dismissed all allegations and instead described the U.S.-based short-seller’s report as a “calculated attack on India” and its “judiciary and regulatory framework”. 

Meanwhile, according to the Bloomberg Billionaires Index, Gautam Adani, who was ranked third in the world’s richest billionaire list, has now dropped to 15th position.