The shares of Adani Group companies witnessed a sharp fall on Tuesday as investors reacted to a report by Hindenburg Research that accused the conglomerate of fraud and market manipulation.
The report alleged that Adani Group inflated its assets and revenues, used dubious offshore entities to siphon funds, and engaged in insider trading and bribery.
The report also claimed that Adani Group’s coal-related businesses pose a serious environmental and social risk.
All 10 Adani Group stocks were trading lower on Tuesday, with four of them, Adani Power, Adani Transmission, Adani Green, and Adani Total Gas, locked in the 5% lower circuit limits.
According to the data from BSE, Adani Enterprises, the group’s flagship company, plunged 8.03% to ₹1,215.65 per share.
Adani Ports and Special Economic Zone, the largest port operator in India, dropped 7.83% to ₹718.55 per share. Adani Power, India’s largest private power producer, tumbled 5% to ₹104.15 per share. Adani Transmission, the largest private transmission company in India, also fell 5% to ₹1,534.55 per share.
Adani Green Energy, India’s largest solar power developer, declined 5% to ₹1,099.95 per share. Adani Total Gas, the largest city gas distribution company in India, slid 5% to ₹1,494.95 per share. Adani Wilmar, India’s largest edible oil producer, lost 4.97% to ₹1,280.05 per share.
Ambuja Cements, a cement manufacturer partly owned by Adani Group, shed 4.11% to ₹392.65 per share. ACC, another cement manufacturer partly owned by Adani Group, dipped 3.92% to ₹2,337.05 per share. NDTV, a media company partly owned by Adani Group, fell 3.57% to ₹67.85 per share.
What does this mean for Adani Group and its investors?
The sharp fall in Adani Group stocks wiped out more than $104 billion of market capitalization from the conglomerate, which had surpassed Tata Group as the most valuable Indian business group in November 2022.
The Hindenburg Research report has raised serious questions about the credibility and sustainability of Adani Group’s growth story, driven by aggressive expansion and debt-fueled acquisitions in various sectors.
Adani Group has denied the allegations made by Hindenburg Research and said that it will take legal action against the short-seller firm for spreading false and malicious information.
The group also said that it is confident of its corporate governance and compliance practices and has always adhered to the laws and regulations of the countries where it operates.
However, some analysts have cautioned that the Hindenburg Research report could trigger regulatory scrutiny and legal action against Adani Group from various authorities and stakeholders. They have also advised investors to be cautious and vigilant while investing in Adani Group stocks until more clarity emerges.
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