On Monday, Adani Group companies saw a significant decline in market value, with losses amounting to as much as $19 billion. This drop came after Hindenburg Research made accusations against the Indian market regulator, suggesting links to offshore funds also utilized by Adani.
Adani Enterprises, the flagship firm of billionaire Gautam Adani, experienced a 2% decrease in morning trade, while other group companies saw declines ranging from 2% to 4.5%. Notably, Adani Enterprises and Adani Ports were among the top losers on India's Nifty 50 index. Although the initial plunge resulted in total losses of $19 billion, these losses later narrowed to $9 billion.
Hindenburg Research, a New York-based short seller, previously made allegations in January 2023 regarding the Adani Group's activities involving tax havens and stock manipulation. Despite Adani denying these claims and share values mostly recovering from a significant drop, an ongoing investigation by the Securities and Exchange Board of India (SEBI) continues.
Over the weekend, Hindenburg released further allegations based on whistleblower documents, suggesting connections between SEBI Chair and offshore funds associated with Vinod Adani, brother of Gautam Adani. Both SEBI Chair and Adani have refuted these fresh claims, asserting transparency in their overseas holding structures.
SEBI urged investors to remain calm and conduct thorough due diligence before reacting to such reports. The regulator's inquiry into the Adani Group, initiated following Hindenburg's initial report, is still in progress. Despite Hindenburg's skepticism towards SEBI's impartiality, India's Supreme Court previously directed the regulator to expedite its investigation and ruled out the need for additional probes into the group.
The recent allegations have stirred unease among retail investors and garnered political attention, with opposition leader Rahul Gandhi questioning the integrity of SEBI in safeguarding small retail investors' wealth. In response, India's economic affairs secretary emphasized that the regulator and the individuals involved have issued statements, with no further comments from the government.
