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BENGALURU: Indian conglomerate Adani Group, which was rocked by a Hindenburg Research report last year, again faced a massive stock sell-off on Monday (Aug 12) after the short seller accused the head of India’s markets regulator of having links with offshore funds used by the group.
By the end of the trading day, Adani had lost $2.43 billion, or 1%, of its market value, although that was a sharp recovery from earlier losses of more than $13 billion.
The battle between Hindenburg Research and Adani Group began 18 months ago when the US short seller accused Adani of improper use of tax havens, but Adani Group on Sunday again denied the allegation, saying its overseas holding structure was fully transparent.
Citing whistleblower documents, Hindenburg on Saturday alleged that Madhabi Puri Buch, who has been the chairman of the Securities and Exchange Board of India (SEBI) since 2022, had a conflict of interest in the Adani case due to his previous investments.
Buch said the report’s allegations were baseless and the regulator said in a separate statement that Hindenburg Research’s allegations against Adani Group had been properly investigated.
Shares of the group’s flagship Adani Enterprises closed 1.1% lower on Monday, while Adani Ports, Adani Total Gas, Adani Power, Adani Wilmar and Adani Energy Solutions fell between 0.6% and 4.2%. Only Adani Green bucked the trend with a 1% gain.
“This is the second allegation. A lot of investigations have been done in the last one and a half years. This is just a temporary knee-jerk reaction. Everything will return to normal,” said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities.
Since Hindenburg’s first report in January 2023, investments from Abu Dhabi-based International Holding and US boutique investment firm GQG Partners have helped restore some investor confidence, with Adani Group’s share price losses narrowing from $150 billion to about $32.5 billion immediately after the report was released.
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