Mixed day for Adani stocks after SEBI submits report on Hindenburg probe

A mixed trend was seen in Adani Group's stocks on Monday as investors turned cautious after the Securities and Exchange Board of India (SEBI) submitted its status report on its investigations against billionaire Gautam Adani-led conglomerate regarding allegations of stock price manipulation by the U.S.-based short-seller Hindenburg Research. The Supreme Court is scheduled to hear the matter on August 29.

The capital market regulator SEBI submitted its 15-page “status report” before the apex court on Friday, saying that it will “take appropriate action based on the outcome of the investigations in accordance with law”.

The SEBI in its submission said that out of the 24 investigations, 22 were final in nature and had been approved by the competent authority in the regulatory body, while remaining two are interim in nature as the regulator had sought information from external agencies and entities.

“SEBI has sought information from external agencies/entities and upon receipt of such information will evaluate the same vis-à-vis the interim investigation report to determine further course of action, if any, in the said matters,” the report noted.

Meanwhile, shares of listed Adani group entities opened mixed today as investors turned jittery ahead of the apex court’s observations on the SEBI’s report. Adani Group's flagship company, Adani Enterprises share price was trading 0.3% lower, while Adani Energy Solutions dropped 0.7%. Among others, Adani Wilmar, Adani Transmission, Adani Green were also trading near the base line with negative bias.

Bucking the trend, Adani Ports and Special Economic Zone (APSEZ), NDTV and Adani Total Gas shares edged marginally higher. The cement entities ACC and Ambuja Cements were top gainers, rising up to 1.5% during the session so far.

After Hindenburg Research released an adverse report against the Adani Group on January 24, the Supreme Court on March 2, 2023, set up a six-member expert committee “to investigate if there was a regulatory failure in dealing with the alleged contravention of laws pertaining to the securities market in relation to the Adani Group or other companies.”

Hindenburg Research in its detailed report, alleged that the port-to-power conglomerate had engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades. “Gautam Adani, Founder, and Chairman of the Adani Group, has amassed a net worth of roughly $120 billion, adding over $100 billion in the past 3 years largely through stock price appreciation in the group’s 7 key listed companies, which have spiked an average of 819% in that period,” the report highlighted.

However, Adani Group strongly refuted the claims made in the Hindenburg report and said it was an attempt to tarnish the reputation of the conglomerate.

In recent times, Adani Group shares witnessed a strong rally after hitting their record lows in February in the aftermath of the Hindenburg report. The combined market capitalisation of the Adani Group stocks crossed the crucial ₹11 lakh levels last week, hitting a six-month high. The recent rally in Adani group stocks can be attributed to investments by Rajiv Jain-led GQG Partners and bulk deal buzz in various Adani group companies. 

GQG currently owns stakes in five of the 10 Adani Group firms -- Adani Enterprises, Adani Ports, Adani Green Energy, Adani Transmission, renamed as Adani Energy Solutions, and Adani Power. In a recent deal, the U.S.-based investment fund picked up an 8.1% stake in Adani Power for more than ₹9,000 crore ($1.1 billion) in a series of block deals on August 16. It also increased its stake in the port and logistics arm of Adani Group, APSEZ by buying 22.56 lakh additional shares of the company through bulk deal on August 17, 2023, raising its shareholding from 4.93% to 5.03%.