BENGALURU: Adani Group, the Indian conglomerate rocked by a Hindenburg Research report last year, faced another heavy share selloff on Monday (Aug 12) after the short seller accused the head of India’s market regulator of having links to offshore funds also used by the group.
US$2.43 billion, or 1 per cent, had been wiped off the market value of Adani companies by the end of the trading day, although that was a substantial recovery from earlier losses of more than US$13 billion.
The battle between Hindenburg Research and the Adani Group began 18 months ago when the US short seller alleged Adani improperly used tax havens, accusations the group denied again on Sunday, saying its overseas holding structure was fully transparent.
Citing whistleblower documents, Hindenburg said on Saturday that Madhabi Puri Buch, chair of the Securities and Exchange Board of India (SEBI) since 2022, has a conflict of interest in the Adani matter due to previous investments.
Buch said the report’s allegations were baseless and in a separate statement the regulator said allegations made by Hindenburg Research against the Adani Group have been duly investigated.
Shares in the group’s flagship firm Adani Enterprises closed out Monday 1.1 per cent lower, while Adani Ports, Adani Total Gas, Adani Power, Adani Wilmar and Adani Energy Solutions were down between 0.6 per cent and 4.2 per cent. Only Adani Green bucked the trend, closing 1 per cent higher.
“The allegations are coming for the second time. Lot of investigations have happened over the last year and a half. This is a temporary, knee-jerk reaction. Things will get back to normalcy,” said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities.
Investments from Abu Dhabi-based International Holding and US boutique investment firm GQG Partners have helped restore some investor confidence since Hindenburg’s first report in January 2023, with Adani Group’s share value losses narrowing to about US$32.5 billion from US$150 billion in the immediate aftermath.
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