The share prices of Adani Group companies fell up to 20% on Friday after the spat between the Group and US-based activist investor firm Hindenburg Research intensified on Thursday. Further, Adani’s point-by-point rebuttal of Hindenburg’s questions seems to have not provided much relief to Group’s listed stocks.
Share prices of Adani Total Gas nosedived 20% to hit a low of Rs 2,934 on the BSE while Adani Green fell 19% to hit a low of Rs 1,488. Shares of the group's flagship Adani Enterprises were down over 8% while those of Adani Ports(APSEZ) shed 10% to hit a new 52-week low; Adani Transmission fell over 17% while Adani Power and Adani Wilmar hit a lower circuit of 5%.
Shares of the Group’s recently acquired cement firms- Ambuja Cement and ACC - were down by 8-10% while its media outlet NDTV was down by 5% on the bourses.
By comparison, India’s equity market benchmarks: BSE Sensex and Nifty fell about 1.20% each at around 11.30 pm.
According to early estimates, the Group’s market cap took a beating of about Rs 2 lakh crore in the first few hours of Friday’s trading sessions. On Wednesday, the Group’s market cap tumbled by about Rs 97,000 crore.
Adani group on Thursday said that it is examining legal options to take "punitive action" against Hinderburg Research after the latter published a report on January 24th where it accused Adani of stock market manipulation, called the share prices of its 7 listed companies ‘over valued’, questioned the role of close family members among other serious allegations.
Post this warning, Hindenburg hit back at Adani and said that the Group did not answer a single question they raised.
“At the conclusion of our report, we asked 88 straightforward questions that we believe give the company a chance to be transparent. Thus far, Adani has not answered any of these questions. Instead, as expected, Adani has resorted to blister and threat,” said Hinderburg.
Hindenburg also said that Adani Group’s seven key listed companies at face value have 85% downside purely on a fundamental basis owing to sky-high valuations and sighted concern on the high debt level at group companies.
Hindenburg holds short positions in Adani Group companies through U.S.-traded bonds and non-Indian-traded derivative instruments. It also said that Adani Group Companies’ use Of extreme leverage spells danger for Creditors.
Adani Group has said that the report and its unsubstantiated contents were designed to have a deleterious effect on the share values of Adani Group companies as Hindenburg Research, by their own admission, is positioned to benefit from a slide in Adani shares.
Meanwhile, billionaire investor William Ackman in a tweet on Thursday said he found Hindenburg’s report on Adani Group "highly credible and extremely well researched".