After Hindenburg, a well-known American short-seller, published a report suggesting that key listed Adani companies have taken on substantial debt, including pledging shares of their inflated stock as collateral for loans, placing the group’s overall financial situation in risk, the stocks of the seven listed Adani group companies dropped between 1.5% and 9%. It has been asserted that the Indian giant engaged in decades-long stock manipulation and accounting fraud.
In Depth details After Hindenburg alleged fraud, Adani Group stocks saw a Rs. 46000 Crore decline in market value:
On the other hand, Adani Group has asserted that the report is timed to damage Adani Enterprises’ upcoming FPO and has malicious motives. The subscription period for the Rs 20,000 crore share sale will begin on January 27. Find out what this means for stockholders and investors in Adani group stocks by watching Sakshi Batra speak with Kranthi Bathini, Director of Research at WealthMills Securities.
Despite the fact that Jefferies analysts say they are monitoring events regarding the debt of the Adani Group, they believe there are minimal concerns for Indian banks as a result of the group’s diversification of its funding sources.
“Our recent discussions with industry players also revealed that cash flows and loan repayment schedules have been managed conservatively. While keeping an eye on developments, the Indian banking industry is not at serious risk, according to the Jefferies research.
Shares of Adani Enterprises closed below the 3,112 price range set as the bottom limit of the price band for its follow-on public offer (FPO).
Ambuja Cements and ACC, two recent purchases of Adani Enterprises, were also negatively impacted by the bear hug; each stock fell by as much as 25% before only slightly rebounding.
According to a report released earlier this week by the New York-based Hindenburg Research, the Adani Group engaged in stock manipulation and accounting fraud. The business aggressively refuted these claims, calling them an intentional attempt to sabotage its FPO.
“Hindenburg Research issued a report on January 24, 2023, without attempting to get in touch with us or confirm the factual matrix, and we are surprised by this. Jugeshinder Singh, chief financial officer of the Adani Group, described the report as a “malicious amalgam of selective disinformation and stale, unsubstantiated, and discredited charges that have been tried and dismissed by India’s highest courts.”
In response, Hindenburg Research indicated it will take legal action if necessary. To be clear, we would welcome the company’s threats of legal action. We firmly stand by our findings and consider that any legal action brought against us would be without foundation. If Adani is sincere, it ought to also bring a lawsuit in the United States, where we do business. We have a lengthy list of records we would request through a court discovery process, according to a statement from the New York-based financial research firm.
According to a Reuters story, the Securities and Exchange Board of India (SEBI), the market regulator, would review the Hindenburg report as part of its current inquiry into the Adani Group’s foreign portfolio investors (FPI).