Hindenburg report on Adani Group leads to bloodbath on D-Street

Tribune News Service

New Delhi, January 27

The stock market tumbled on Friday due to an unfavourable research report about the Adani Group, whose firms alone have lost over Rs 4.17 lakh crore in market valuation. With a net worth of $96.6 billion, billionaire Gautam Adani is now the world’s seventh richest man, according to Forbes, slipping from the third position he held before the Hindenburg report.

SENSEX tanks 874.16 POINTS

Biggest loss in a month

CLOSES AT 59,330.90

• Investors lose over Rs 10.73L cr, fall triggered by report on Adani Group
• NSE Nifty tumbles 287.60 points to end at 3-month low of 17,604.35

LIC, SBI investments in Adani at risk: Congress

Liberal investments in the Adani Group by LIC, SBI and state entities may be at risk, the Congress alleged on Friday, citing the “close relationship between the Adani Group and the current government”.

The Sensex lost 874 points and Nifty slid below 17,600 points, with investors losing an estimated Rs 12 lakh crore in two days of broad-based selling that also impacted banking stocks as the report by US short-seller Hindenburg Research gave the impression that Indian public sector banks were over-exposed to the Adani Group. The Hindenburg report will also impact the Adani Enterprises’ follow-on public offer (FPO) of Rs 20,000 crore. With the scrip now ruling at Rs 2,762, much below the FPO’s price band of Rs 3,112-Rs 3,276, retail investors will hesitate from subscribing to the FPO. Already questions are being asked about LIC’s exposure in the Adani Group, which lost Rs 23,000 crore in two days, from Rs 77,000 crore to Rs 53,000 crore at the end of trading on Friday.

All listed stocks of the Adani Group turned bearish and cumulatively lost nearly 20 per cent. These included Adani Total Gas (Rs 1 lakh crore), Adani Transmission (Rs 83,265 crore), Adani Green Energy (Rs 67,962 crore), Adani Enterprises (Rs 77,588 crore) and Adani Ports (Rs 35,048 crore).

In addition to the allegations by Hindenburg, other events also impacted the bourses. These include continuation of heavy selling by foreign institutional investors and caution ahead of the United States Federal Reserve meetings and the Union Budget next week.

The Adani Group hit back at the Hindenburg Research, saying it was examining legal options to take “punitive action” against the firm for its “reckless” attempt to sabotage the Group’s Rs 20,000-crore FPO.

But Hindenburg Research said it would welcome legal action.

About The Author

Tribune News Service

The Tribune News Service brings you the latest news, analysis and insights from the region, India and around the world. Follow the Tribune News Service for a wide-ranging coverage of events as they unfold, with perspective and clarity.

Join Whatsapp Channel of The Tribune for latest updates.

#gautam adani