Securities and Exchange Board of India (Sebi), the market regulator, has stated that it is now investigating the specific accusations made by US-based short seller Hindenburg Research against the Gautam Adani-led company in its report published in January. According to a Bloomberg story, Sebi is allegedly looking into the allegations made by both Hindenburg and the Adani Group, although it has not yet discovered any errors in the paperwork. But, Sebi hasn’t yet made a formal announcement on its probe.
A brief about Sebi has not found any irregularities yet in respect to Adani-Hindenburg issue report
According to the report, Sebi is closely examining the listed companies of the Adani Group, their operations, and share trading. Yet, the market regulator has made it clear that nothing it does could be interpreted as an official probe.
On February 13, Sebi informed the Supreme Court that it is “enquiring” into the claims made against the Adani Group of Companies and their effect on the markets by US short seller Hindenburg Research. According to Sebi, it is investigating the market actions of the entire group “before to and following the publishing of the report” to see if any regulations have been broken.
The Adani Group was accused of “brazen stock manipulation and accounting fraud for decades” according to the Hindenburg report, which was made public on January 24. Additionally, it claimed that the Indian giant had used phoney firms to engage in stock manipulation and fraud. The principal listed Adani companies have reportedly taken on significant debt, including using shares of their “inflated stock” as collateral for loans, placing the entire group “on hazardous financial footing,” according to the short seller’s research.
A significant selloff of Adani Group equities was sparked by the story. By the end of Monday, the group’s market value had fallen below Rs 7 lakh crore. The group’s market capitalization lost another Rs 34,000 crore on Monday, bringing the overall market capitalization erosion since the publishing of the Hindenburg Research study to 64%, or around Rs 12.37 lakh crore.
As of Monday, Flagship Adani Enterprises’ market capitalization (mcap) was Rs. 1.36 lakh crore, which is 65% less than its January 24 value of Rs. 3.92 lakh crore.Since January 24, the value of Adani Total Gas, Adani Green Energy, and Adani Transmission has decreased by more than three-fourths.
After news broke on Tuesday that the troubled company intended to prepay or refund share-backed debts totaling $690 million to $790 million by the end of March, many Adani Group equities experienced a significant bounce.
S&P Global last Monday confirmed its rating of Adani Green Energy at “BB+” with a stable outlook, despite the severe market carnage. The business is no longer under the credit rating agency’s scrutiny in America.
Due to the company’s robust reserve mechanism, S&P stated that it anticipates the company’s restricted group will assist in meeting payback commitments.
Three companies are included in Adani Green’s restricted group 2: Adani Renewable Energy, Kodangal Solar Park, and Wardha Solar (Maharashtra) (RJ).
Adani Green Energy Company was placed on criteria observation when the agency announced its updated rating criteria for project finance transactions on December 14 of last year. The agency on Friday said it had concluded its investigation of AGEL RG2 and “believes the updated criteria does not impair our assessment of the project’s creditworthiness”.
Even Fitch Ratings confirmed the “BBB-” ratings last week for the $400 million in senior secured notes that Adani Transmission Ltd. issued. According to the rating agency, the company owned by the troubled Adani Group has a stable outlook.