Adani Stocks Fall by Up to 7% as Investors Play It Safe after Hindenburg Resurfaces

Shares of Adani Group companies fell up to 7% this morning as many investors chose to be cautious following allegations levelled against Sebi chief Madhabi Buch in the Adani vs. Hindenburg controversy. As a result, investors lost approximately Rs 53,000 crore, and the combined market capitalisation of 10 Adani stocks fell to Rs 16.7 lakh crore. Adani Green Energy shares were among the worst hit, falling 7% to a day low of Rs 1,656 on BSE before recovering some of the losses.

Adani Total Gas shares were down around 5%, Adani Power by 4%, and Adani Wilmar, Adani Energy Solutions, and Adani Enterprises by about 3%. Adani Ports' Nifty stock fell around 2%, making it the blue-chip index's second-biggest loser after the conglomerate's flagship entity, Adani Enterprise.

While the Hindenburg report makes no new allegations against the Adani Group, it does claim that Sebi chief Buch and her husband Dhaval Buch owned stakes in Bermuda and Mauritius-based offshore funds used by Gautam Adani's brother Vinod Adani "to amass and trade large positions in shares of the Adani Group." As the report raised questions about Sebi's credibility as an objective arbiter in the Adani case, opposition leaders demanded Buch's resignation and a JPC investigation into the Hindenburg report.

Buch has denied all allegations, and Sebi has issued a statement stating that Buch has made all relevant disclosures regarding securities holdings and transfers from time to time. "Chairperson has also recused herself in matters involving potential conflicts of interest," according to a statement.

Market analysts have dismissed the report as "sensationalism" and predicted that it will have little impact on stock prices. Some market participants were concerned about a repeat of the market crash that followed the Hindenburg report in January 2023, which accused the airports-to-edible oil conglomerate of stock manipulation, syphoning funds, and other corporate governance violations.

"During the ongoing investigation in this matter, more than 100 summonses and around 1,100 letters and emails have been issued to seek information. Further, more than 100 communications have been made seeking assistance from domestic/foreign regulators and external agencies. Also, more than 300 documents containing around 12,000 pages have been examined," Sebi said.

Hindenburg 2.0 had little impact on the broader market. The Sensex traded 400 points lower, led by heavyweights ICICI Bank, RIL, and SBI.