Investors Unfazed by Hindenburg Response; Adani Ent and Adani Ports Stocks Trade Flat
Most Adani Group stocks traded little changed after the SEBI’s show cause notice to the US-based short-seller Hindenburg Research.
Adani Group stocks: Most Adani Group stocks traded flat in early deals on Tuesday, July 2, indicating calm among Indian investors after Hindenburg’s response to the Indian capital market regulator’s show-cause notice, which it termed as an “attempt to silence and intimidate those who expose corruption.”
Shares of the group’s flagship firm, Adani Enterprises, slipped about 0.4 per cent in opening deals while those of Adani Ports inched up by 0.07 per cent.
Shares of Adani Total Gas (up 0.91 per cent), NDTV (up 0.88 per cent), Adani Wilmar (up 0.45 per cent), ACC (up 0.35 per cent), Adani Energy Solutions (up 0.13 per cent), Ambuja Cements (up 0.12 per cent), Adani Green (up 0.03 per cent) and Adani Power (down 0.24 per cent) saw mild movements in opening trade on BSE.
India’s capital market regulator, the Securities and Exchange Board of India (SEBI), issued a show-cause notice to the US-based short-seller Hindenburg Research.
In response, Hindenburg Research has said it received a show-cause notice from SEBI, which it thinks is “nonsense, concocted to serve a pre-ordained purpose: an attempt to silence and intimidate those who expose corruption and fraud perpetrated by the most powerful individuals in India.”
According to media reports, SEBI’s 46-page show-cause notice details Hindenburg’s relationship with an investor who took a short position in Adani. In response, Hindenburg stated that it had one investor partner and, after accounting for costs, it might “barely come out above breakeven” on its Adani short.
The short-seller reported earning $4.1 million in gross revenue from “gains related to Adani shorts from that investor relationship” and only $31,000 from its short position in Adani’s US bonds. The investor’s name was not disclosed, media reports further added.
Hindenburg Research alleged last year that the Adani Group was involved in stock manipulation tactics and accounting fraud schemes over the course of decades. This triggered a sharp selloff in the group’s stocks last year, making them lose nearly $150 billion.
The Adani Group denied the allegations in a 413-page response.
SEBI has been investigating the matter since last year. The Supreme Court of India has instructed the market regulator to complete its investigation by August 14 this year.
In January this year, India’s apex court said, in its response to public interest litigants, that SEBI would investigate the issue, and the case did not warrant a transfer of investigation to other agencies like a Special Investigating Team (SIT).
Most Adani Group stocks have risen significantly from their January 2023 low levels.
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