Adani Shares Under Pressure
The Adani Group, a major Indian conglomerate, saw its stock prices tumble on Monday, following fresh allegations from U.S.-based short-seller Hindenburg Research. These allegations suggest a possible conflict of interest involving India's securities regulator, SEBI, and offshore funds linked to Adani.
Stocks Affected
Key players such as Adani Enterprises Ltd and Adani Ports and Special Economic Zone Ltd experienced significant drops, with shares falling between 4% and 2.8% in morning trading. Other entities like Adani Total Gas Ltd, Adani Energy Solutions Ltd, Adani Green Energy Ltd, and Adani Wilmar Ltd also declined, with losses ranging from 3% to 6%.
Allegations and Denials
Hindenburg Research alleged that Madhabi Puri Buch, SEBI's chairperson, had investments in offshore funds connected to Adani. These funds were previously accused by Hindenburg of artificially inflating Adani's stock prices. However, Buch countered these claims, noting her investments occurred two years before she assumed her current role at SEBI.
This situation represents the latest twist in an ongoing saga, as Hindenburg had already accused Adani of stock price manipulation and money laundering in a report last year. SEBI launched an investigation into these claims, which is still active.
Market Impact and Responses
While Adani's shares initially suffered deep losses after the Hindenburg report, they managed to recoup much of the decline over the past year. The ongoing allegations have drawn criticism from SEBI and India's ruling BJP party, prompting SEBI to issue a show cause notice to Hindenburg.
In a strong rebuttal, Adani dismissed the new allegations over the weekend, stating, "We completely reject these allegations against the Adani Group which are a recycling of discredited claims… The Adani Group has absolutely no commercial relationship with the individuals or matters mentioned."
The decline in Adani's stock prices exerted downward pressure on broader Indian markets, causing notable indices like the Nifty 50 and S&P BSE Sensex to drop by about 0.4% each.
