As a result of a study by US-based Hindenburg Research, shares of the Adani group of companies declined significantly during trade on Wednesday. A short position in Adani group companies is held, according to Hindenburg, through US-traded bonds, non-Indian derivatives, and other non-Indian reference securities. Adani Enterprises Ltd. (AEL), the group’s flagship firm, saw the biggest drop during the morning session, dropping more than 3% across the board for the Adani group equities. However, the Adani group has referred to the Hindenburg Research research as “a deliberate combination of selected misinformation and stale, unsubstantiated and discredited charges that have been tried and dismissed by India’s highest courts.”
Adani Enterprises finished Wednesday 1.54% down at Rs3,389.85 on the BSE after climbing from a low of Rs3,315.70, while the 30-share Sensex concluded the day 773 points lower at 60,205.06 points. Adani Power Ltd. closed 5% lower at Rs261.10 while Adani Ports and Special Economic Zone Ltd. fell 6.3% to Rs712.90.
Adani Transmission Ltd. shares ended the day on Wednesday 8.87% lower at Rs2,511.75, Adani Green Energy Ltd. shares concluded the day 3.04% lower at Rs1,855.45, Adani Total Gas Ltd. shares dropped to Rs3,668.15, and Adani Wilmar Ltd. shares dropped to Rs544.50 on the BSE.
The seven core listed firms of the Adani group are 85%+ overpriced, according to the US-based investment research firm with a concentration on activist short-selling, even if you disregard our findings and accept the companies’ financials at face value.
The massive Rs 20,000 crore follow-on public offering (FPO) for Adani Group’s flagship company, Adani Enterprises, is now being prepared.
In a statement, Jugeshinder Singh, group chief financial officer (CFO) of Adani group, says, “The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani group’s reputation with the principal objective of damaging the upcoming follow-on public offering from Adani Enterprises, the biggest FPO ever in India. The investor community has always reposed faith in the Adani group on the basis of detailed analysis and reports prepared by financial experts and leading national and international credit rating agencies. Our informed and knowledgeable investors are not influenced by one-sided, motivated and unsubstantiated reports with vested interests.”
Shares of the Adani group of enterprises experienced a dramatic fall in October of last year. Over the previous three years, the same equities have staged a significant gain. The group’s enormous debt as well as the overall unfavourable macroeconomic climate were blamed for the October correction. Debt papers for the Adani Group have been declining while equity shares have been increasing.
Although the Adani Group’s stock has outperformed the market, its debt instruments are in a free fall. Concerns regarding the group debt have led to a decrease in the bonds of Adani group companies this year. Bonds issued by group entities, such as Adani Green Energy and Adani Transmission Step-One Ltd, underperformed the Indian market in the majority of cases, according to news agency.
