Adani Group Stocks In Red Amid New Allegations by Hindenburg Research
News Mania Desk/Agnibeena Ghosh/12th August 2024
The Adani Group, one of India’s largest conglomerates, has found itself at the center of a fresh controversy that has sent its stock prices tumbling. On Monday, shares of various Adani Group entities took a significant hit as markets opened, reacting to the latest allegations made by U.S.-based short seller Hindenburg Research. This downturn has further dented investor sentiment, which has already been shaken by previous controversies surrounding the group.
Hindenburg Research, known for its aggressive short-selling tactics, released a report on August 10 that accused the Adani Group of being involved in new financial improprieties. The report specifically alleged the involvement of SEBI (Securities and Exchange Board of India) Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, in offshore funds implicated in earlier accusations against the Adani Group. The allegations claim that these funds were used to siphon money, a charge that has been strongly denied by both Madhabi and Dhaval Buch.
In response to these allegations, the stock market witnessed a sharp decline in the value of Adani Group shares as trading commenced on Monday. By 9:41 AM, Adani Enterprises, the flagship company of the conglomerate, saw its stock price plummet by over 3%, trading at Rs 3,079 per share on the Bombay Stock Exchange (BSE). Similarly, Adani Ports and Special Economic Zone Ltd experienced a 2.4% drop, with shares trading at Rs 1,496.45. Adani Power also faced a severe downturn, with its stock price falling nearly 5% to Rs 661.95. Adani Green Energy was not spared either, as it saw a 3.78% decline, bringing its share price down to Rs 1,712.85 on the BSE.
The broader market also reflected the negative sentiment, with the BSE Sensex opening in the red. By 9:50 AM, the index had plunged 281.86 points, or 0.35%, dipping below the 79,500 mark to trade at 79,424.05. The latest allegations have clearly rattled investors, leading to a sell-off in Adani Group stocks.
The timing of this market turmoil is particularly significant, as it comes just a month after the Adani Group was embroiled in another major controversy. In that instance, Hindenburg Research’s earlier allegations had already caused a significant drop in the group’s stock prices. The latest report not only resurrects concerns about the group’s financial practices but also implicates a high-ranking official within India’s financial regulatory framework, adding another layer of complexity to the situation.
In response to the allegations, SEBI and Madhabi Puri Buch have both issued strong denials. They refute any involvement in the offshore funds or any conflicts of interest. The Adani Group has also categorically denied having any commercial dealings with the SEBI chairperson, labeling the latest Hindenburg report as “malicious” and “mischievous.”
As the situation continues to develop, the Adani Group will need to navigate these allegations carefully to regain investor confidence. The market will be closely watching how the group addresses these concerns and whether it can stabilize its stock prices in the wake of these fresh accusations.
