Stocks of the nine listed Adani Group companies displayed a mixed trend after Adani Group issued a detailed riposte on Sunday (29 January) to a Hindenburg Research report that sparked sharp selloff in its stocks.
Adani Enterprises (up 3.88%), Ambuja Cements (up 3.66) and ACC (up 0.66%) rose.Adani Ports and Special Economic Zone (down 0.33%), Adani Transmission (down 20%), Adani Wilmar (down 5%), Adani Power (down 5%), Adani Total Gas (down 20%), Adani Green Energy (down 20%) slumped.
The Nifty 50 index was down 66.70 points, or 0.38% at 17,537.65.
Last week, US-based Hindenburg Research LLC said it shorted Adani Group companies due to brazen market manipulation and accounting fraud.
Hindenburg, an US-based investment research firm that specializes in activist short-selling, made wide-ranging allegations of corporate malpractice following a two-year investigation into the Adani group companies.
"We hold short positions in Adani Group Companies through U.S.-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities," Hindenburg disclosed in its research report published on 24 January 2023.
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Adani Group stocks tanked on Friday, 27 January 2023, as the Hindenburg report spooked traders.
The conglomerate led by Asia's richest man, the Indian billionaire Gautam Adani, on Sunday (29 January) published a 413-page rebuttal to a short seller's allegations. The Adani Group said some 65 of the 88 questions raised by Hindenburg Research have already been addressed in public disclosures and called the US firm's conduct "nothing short of a calculated securities fraud under applicable law." It also repeated a threat of legal action.
"All transactions entered into by us with entities who qualify as 'related parties' under Indian laws and accounting standards have been duly disclosed by us," Adani said in its response.
"This is rife with conflict of interest and intended only to create a false market in securities to enable Hindenburg, an admitted short seller, to book massive financial gain through wrongful means at the cost of countless investors," it added.
The research report, Adani said, made "misleading claims around offshore entities" without any evidence whatsoever.
Hindenburg has not published this report for any altruistic reasons but purely out of selfish motives and in flagrant breach of applicable securities and foreign exchange laws," it said. "The report is neither 'independent' nor 'objective' nor 'well researched'."
Adani said on Thursday that it is considering taking action against Hindenburg, which responded on the same day by saying it would welcome such a move.
In response to the Adani Group's rebuttal, Hindenburg Research on 29 January 2023 said that the Adani Group has failed to specifically answer 62 out of the 88 questions that the firm had posed to the group. "Adani's response largely confirmed our findings and ignored our key questions," it said.
"Our report asked 88 specific questions of the Adani Group. In its response, Adani failed to specifically answer 62 of them. Instead, it mainly grouped questions together in categories and provided generalized deflections. In other instances, Adani simply pointed to its own filings and declared the questions or relevant matters settled, again failing to substantively address the issues raised," it said.
"In terms of substance, Adani's '413 page' response only included about 30 pages focused on issues related to our report. The remainder of the response consisted of 330 pages of court records, along with 53 pages of high-level financials, general information, and details on irrelevant corporate initiatives, such as how it encourages female entrepreneurship and the production of safe vegetables," Hindenburg added.
Meanwhile, Adani Enterprise pushed ahead with its planned Rs 20,000 crore follow-on public offer. The FPO, which opened on 27 January, will conclude on 31 January. As on 12:39 IST on Monday (30 January), the issue received bids for 7,19,036 equity shares against the issue size of 4,55,06,791 equity shares. The FPO was subscribed 0.02 times.
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