Adani stocks slump post Hindenburg report

NEW DELHI:  Share prices of Adani Group’s listed companies fell up to 23% on Friday (intra-day) as the spat between the Group and US-based activist investor firm Hindenburg Research intensified on Thursday. 

Adani’s point by point rebuttal of Hindenburg’s questions seems to have not provided any relief from aggressive sell-off.  The two-day massive fall seen across Adani stocks has wiped out market capitalisation (m-cap) of its listed entities by Rs 4 lakh crore. On Wednesday, the Group’s m-cap eroded by a little less than Rs 1 lakh crore and on Friday its valuation fell about  Rs 3 lakh crore. 

Most Adani stocks closed after hitting lower circuits on Friday.  Adani Total Gas, Adani Transmission and Adani Green fell 20% each, while Adani Wilmer and Adani Power were locked in to their lower circuit of 5%.  Share of Adani Enterprises was down over 18% at close while those of Adani Ports (APSEZ) shed 16% to hit a new closing 52-week low. 

Shares of the Group’s recently acquired cement firms - Ambuja Cement and ACC – were down 13-17%, while its media outlet NDTV was down 5% on bourses. In comparison, equity market benchmarks - BSE Sensex and NSE Nifty - fell about 1.50% on Friday. Meanwhile, the follow-on public offering (FPO), largest-ever in Indian capital market, received bids for 4.7 lakh shares or 1% of the issue size of 4.55 crore shares on Friday, first day of bidding, as per the BSE data.

Fall in Adani stocks was seen after a report published by US-based short seller-Hindenburg Research. The report said shares of 7 listed Adani firms ‘over valued’, questioned the role of close family members, raised questions about shell firms among other allegations. Proxy advisory firm InGovern came out in Adani’s support saying Hindenburg should be considered as just another market participant, which has a motivated view to release a negative report with aim to bring down the stock price.