Adani Group, the ports-to-energy conglomerate led by Indian billionaire Gautam Adani, has been accused by US-based short seller firm Hindenburg Research of engaging in “brazen” stock manipulation and accounting fraud. On Wednesday, Hindenburg Research published a lengthy report on Adani and his group, alleging massive fraud and stock manipulation. The report sent shares tied to seven of the Adani Group’s listed companies falling by more than 5%, taking a $10.8 billion hit, and forcing the company to issue a strong denial of its contents.
On January 25th, the stocks of the seven publicly traded companies within the Adani Group dropped by as much as 10% on Indian stock exchanges. Today (Jan. 25), the stocks experienced a decrease of 18%.[0] Data from BSE reveals that the company lost $24.5 billion in market capitalization due to the massive selloff.[0]
Hindenburg Research has declared that they have adopted a ‘short’ position in Adani’s US-traded bonds and Indian-listed derivatives, suggesting that they anticipate a decrease in the already over-leveraged stocks of the organization.[1]
Jatin Jalundhwala, lead head of the Adani Group, issued a statement expressing his concern over the volatility in the Indian stock markets caused by the Hindenburg Research report, released on the 24th of January 2023, which had a damaging effect on the Group, its shareholders, and investors. The report was irresponsible and has caused great distress to Indian citizens.[2]
Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its seven key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations, the report said.[0] The report also highlighted that the group is on an unstable financial footing due to their large amount of debt.[3]
The statement from the ports-to-energy conglomerate declared that the report is an insidious amalgamation of biased false information and aged, baseless and discredited accusations that have been tried and dismissed by India’s supreme courts.[4]
The selloff in Gautam Adani’s corporate empire accelerated on Friday, erasing more than $51 billion of market value in two sessions as Asia’s richest man struggles to contain the fallout from the Hindenburg report.[5]
0. “A US research firm has accused Adani of pulling “the largest con in corporate history”” Yahoo! Voices, 25 Jan. 2023, https://www.yahoo.com/now/us-research-firm-accused-adani-090000488.html
1. “Adani shares fall as short seller firm Hindenburg announces short position” CNBC, 25 Jan. 2023, https://www.cnbc.com/2023/01/25/adani-group-hindenburg-short-position.html
2. “Adani Group: Asia’s richest man hits back at ‘con’ allegations” BBC, 26 Jan. 2023, https://www.bbc.com/news/business-64408720
3. “Gautam Adani Accused of ‘Largest Con in Corporate History’” TIME, 25 Jan. 2023, https://time.com/6250052/adani-hindenburg-fraud/
4. “Adani net worth crashes $5.5B in a day after short-seller allegations” Markets Insider, 26 Jan. 2023, https://markets.businessinsider.com/news/stocks/gautam-adani-hindenburg-allegations-net-worth-crash-2023-1
5. “Adani Rout Crosses $50 Billion as Stocks Plunge by Daily Limits” Yahoo News, 27 Jan. 2023, https://news.yahoo.com/adani-group-stocks-plunge-extending-041424709.html