Rs 97,000 crore gone! 10 Adani Group stocks slide on Hindenburg's allegations; what lies ahead

January 27,2023

Market capitalisation of the ten listed Adani Group stocks took a beating on Wednesday amid a report by Hindenburg Research claiming that the Indian conglomerate had engaged in stock manipulation and accounting fraud scheme over the course of last few decades. Following the allegations, the combined market capitalisation of the group stocks tanked Rs 96,672 crore to Rs 18.23 lakh crore from Rs 19.20 lakh crore on January 24.

In a regulatory filing, Adani Group said Hindenburg Research published the report without making any attempt to contact them 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,” said Jugeshinder Singh, Group CFO, Adani.

Share price movement

Shares of Adani Enterprises declined 1.54 per cent to Rs 3,389.85 on January 25. Adani Green Energy, Adani Ports and Special Economic Zone, Adani Power, Adani Total Gas, Adani Transmission and Adani Wilmar also slipped anywhere between 5 per cent and 9 per cent. Adani’s recent acquisitions namely ACC, Ambuja Cements and NDTV also declined 7.26 per cent, 7.71 per cent and 4.98 per cent, respectively.

Hindenburg Research’s report came at a time when Adani Enterprises is set to launch its Rs 20,000-crore follow-on public offer for subscription on Friday.

Market watcher, Kranthi Bathini, Equity Strategist, WealthMills Securities said, “The timing of this report is contentious. Points mentioned in this report are not proven and none of this has taken place recently; yet the report getting published around the time of the company’s fundraising raises doubts."

What’s next?

Bathini advised existing Adani investors to continue to hold their positions.

Nikhil Gangil, founder of Intrinsic Value Equity Advisors said, “I would stay away from Adani Group stocks at present valuations. It is important to note that Hindenburg is a short-seller. Clearly, it has an agenda for such a research report. But some of the things that the report alleged were already a part of discussions among investors' fraternity."

FPO: Avoid or skip?

Adani Enterprises’ Rs 20,000-crore FPO will open for subscription on January 27. The public issue is a process by which an already listed company issues new shares to investors or existing shareholders. FPO is used by companies to diversify their equity base. Individual investors, including high-net-worth individuals (HNIs), together held a 2.22 per cent stake in Adani Enterprises for the quarter that ended September 30, 2022. The issue will close on January 31, 2023.

The company has offered a discount of Rs 64 per equity share for retail individual bidders bidding in the retail portion of the offer. While sharing his views on FPO, Bathini said: “The FPO will sail through. Investors with a high-risk appetite can chip in the FPO. But investors should keep an eye on quarterly results and how the group will reduce its debt going ahead.”


The Hindenburg Research report claimed that key listed Adani companies have taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing.

Data available with Ace Equity showed that promoters pledging in Adani Enterprises stood at just 2.66 per cent as of December 31, 2022. Promoters held a 72.63 per cent stake in the company in Q3FY23. Promoters’ pledging in Adani Green and Adani Transmission stood at 4.36 per cent and 6.62 per cent, respectively. However, pledging by promoters in Adani Ports and Special Economic Zone and Adani Power stood at 17.31 per cent and 25.01 per cent, respectively. Promoters have not pledged any of their stakes in Adani Wilmar and Adani Total Gas, the data showed.