Adani Group shares plummet by $9b

Adani Group’s market value saw a staggering decline of up to $19 billion on Monday before clawing back some of its losses, closing the day with a $9 billion dip.

The plunge was triggered by fresh allegations from Hindenburg Research against the head of India’s Securities and Exchange Board (SEBI), Madhabi Puri Buch.

Hindenburg Research, known for its critical reports on major corporations, accused Buch and her husband of having financial interests in offshore funds linked to Adani Group’s associates.

This revelation sent shockwaves through the market, causing a knee-jerk reaction among investors.

Adani Enterprises and Adani Ports were particularly hard-hit, emerging as the biggest losers on the Nifty 50 index. Despite the initial turmoil, the index managed to recover, ending the day up by 0.4%.

Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, downplayed the impact, calling it a “temporary, knee-jerk reaction” and expressing confidence that the situation would normalize soon.

Hindenburg’s latest report, citing whistleblower documents, claims that Buch and her husband hold stakes in offshore funds where substantial investments were made by associates of Vinod Adani, brother of Adani Group’s founder, Gautam Adani. Buch has dismissed these allegations as baseless, while Adani Group asserts that its overseas holding structure is fully transparent.

SEBI has urged investors to remain calm and exercise due diligence before reacting to such reports. This comes in the wake of Hindenburg’s earlier allegations in January 2023, which accused Adani Group of improper use of tax havens and stock manipulation, leading to a $150 billion stock rout. Although Adani Group denied those allegations, an inquiry led by Buch is still ongoing.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted that the latest allegations are likely to affect investor sentiment in the short to medium term, especially among retail investors.

The political arena has also been stirred, with opposition leader Rahul Gandhi questioning the integrity of SEBI on social media platform X. Meanwhile, India’s economic affairs secretary, Ajay Seth, stated that the regulator and the concerned individual have already made their statements, and the government has nothing further to add.