Highlights:
- On Friday, the value of the shares in the Adani Group companies plunged.
- The circuits of two listed Adani Group companies declined.
- Adani Total Gas had a 20% decline.
Seven listed Adani Group companies’ shares continued to decline on Friday, with several hitting the lower circuit and others dropping as much as 20%.
Even as the follow-on public offer (FPO) began today, the flagship Adani Enterprises was down nearly 6%. Adani Transmission dropped by 17%, Adani Ports & SEZ sank by over 10%, Adani Green Energy fell by almost 15%, and Adani Total Gas fell by 20%. Adani Power and Adani Wilmar had reached their lower 5 percent circuits.
In addition, the shares of ACC and Ambuja Cement, two Adani Group-owned cement manufacturers, plummeted between 9 and 11%. The price of NDTV shares fell by 5% as well.
If the share prices do not rise by the end of today’s trading session, the market capitalization of Adani Group companies is expected to suffer significantly. The market capitalization of the Adani Group companies fell by Rs 1 lakh crore during the previous trading session on Wednesday. As of today, the market share of 10 Adani Group companies’ shares has decreased by a total of Rs. 2.37 lakh crore.
Why are the shares of Adani Group falling?
Shares of listed Adani Group companies have been falling rapidly for two consecutive trading days as a result of investor panic brought on by a report from the US short-seller firm Hindenburg Research.
The billionaire Gautam Adani-owned company was accused of “brazen stock manipulation and accounting fraud scheme over the course of decades” by Hindenburg, which has taken short positions in Adani Group companies.
According to the report, “Even if you disregard the results of our investigation and accept the Adani Group’s financials at face value, its seven core listed firms have 85% downside merely on a fundamental basis due to sky-high valuations.”
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Adani Group strongly disagreed with the Hindenburg report, calling it “baseless” and published with the “malicious” goal of undermining the likelihood of the Adani Enterprises FPO.
Jugeshinder Singh, the chief financial officer of Adani Group, stated: “We are shocked that Hindenburg Research published a report on January 24, 2023, without making any effort to contact us or verify the factual matrix.
In a different statement made public on Thursday, Adani Group said it was considering legal action against Hindenburg for gravely hurting its shareholders and investors.
Additionally, Hindenburg Research issued a post on Twitter in which it stated that it was sticking by its findings and thought that any “legal action” brought against them “would be meritless.”
Our response to Adani: pic.twitter.com/6NcFKR8gEL
— Hindenburg Research (@HindenburgRes) January 26, 2023
What do analysts think?
The stocks of listed Adani Group companies have plunged as a result of the Hindenburg report, but analysts do not foresee any significant effects. Numerous media have mentioned analysts who have questioned the timing of the research and claimed that its findings have been validated to this point.
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