Adani Group, Shares of seven listed Adani Group companies continued to bleed on Friday, with some entities hitting the lower circuit and others falling up to 20 per cent.
The flagship Adani Enterprises was down nearly 6 per cent even as its follow-on public offer (FPO) kicked off today. Adani Transmission fell 17 per cent, Adani Ports & SEZ was down nearly 10 per cent, Adani Green Energy plummeted nearly 15 per cent and Adani Total Gas was down 20 per cent. Adani Wilmar and Adani Power had hit their lower circuits of 5 per cent.
Additionally, two cement companies owned by the Adani Group, ACC and Ambuja Cement, also fell in the range of 9-11 per cent. NDTV shares also hit a lower circuit of 5 per cent.
Adani Group companies market capitalisation is likely to take a major hit if the share prices do not recover by the end of today’s trading session. In the previous trading session on Wednesday, Adani Group companies lost a cumulative market cap of Rs 1 lakh crore.
As of today, shares of 10 companies owned by Adani Group have seen a cumulative market share decline of Rs 2.37 lakh crore.
Why are Adani Group stocks bleeding?
Shares of listed Adani Group companies have been in a free fall for two consecutive trading sessions after a report by an US short-seller firm, Hindenburg Research, triggered panic among investors.
Hindenburg, which has taken short positions in Adani Group companies, accused the billionaire Gautam Adani-owned conglomerate of “brazen stock manipulation and accounting fraud scheme over the course of decades”.
“Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its seven key listed companies have 85 per cent downside purely on a fundamental basis owing to sky-high valuations,” the report said.
Reacting strongly to the Hindenburg report, Adani Group said it was completely “baseless” and released with “malicious” intent to tarnish the prospect of the Adani Enterprises FPO.
Adani Group CFO Jugeshinder Singh said, “We are shocked that Hindenburg Research published a report on January 24, 2023, without making any attempt to contact us or verify the factual matrix.”
“The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts,” he said.
In another statement released on Thursday, Adani Group said it was evaluating legal action against Hindenburg for causing deep distress to its investors and shareholders.
Hindenburg Research also released a statement on Twitter and said it stands by its report and believes that any “legal action” taken against them “would be meritless”.
What do analysts say?
The Hindenburg report has triggered a free fall in stocks of listed Adani Group companies, but analysts do not see any material impact.
Analysts quoted in several reports have questioned the timing of the report and also said the findings of the report have been proven till date.
Meanwhile, Esquire Capital Investment Advisors Chief Executive Samrat Dasgupta told news agency Reuters that he does not see much effect of the Hindenburg report, adding that the Adani Enterprises FPO should “sail through successfully”.