- Thursday, September 12, 2024
The hammering Adani stocks suffered after Hindenburg’s first disclosure early last year was so strong that many of the stocks have still not fully recovered
By: Shajil Kumar
HINDENBURG Research’s latest allegations have once again come to haunt the Adani Group’s stocks.
The US-based short-seller has alleged that a conflict of interest was preventing Sebi chairperson Madhabi Puri Buch from thoroughly probing the allegations against Adani group it had raised in January, 2023.
In a blogpost, Hindenburg said 18 months since its damning report on Adani, “SEBI has shown a surprising lack of interest in Adani’s alleged undisclosed web of Mauritius and offshore shell entities.”
Citing “whistleblower documents”, it alleged that Madhabi Buch and her husband had stakes in obscure offshore funds used in the Adani money siphoning scandal.
Buch as well as Adani group issued strong denials on Sunday.
When the markets opened on Monday, it was expected that the ten stocks of the Adani group companies would experience fierce headwinds.
In fact, the hammering Adani stocks suffered after Hindenburg’s first disclosure early last year was so strong that many of the stocks have still not fully recovered.
When the trading started in the Bombay Stock Exchange on Monday, shares of its flagship company Adani Enterprises Ltd slipped as much as 5.5 per cent and Adani Energy Solutions Ltd plummeted 17 per cent.
All the other eight stocks also suffered losses. Adani Total Gas tanked 13.39 per cent, NDTV (11 per cent), Adani Power (10.94 per cent) Adani Green Energy (6.96 per cent) Adani Wilmar (6.49 per cent), Adani Ports (4.95 per cent), Ambuja Cements (2.53 per cent) and ACC (2.42 per cent).
However, as the day progressed, a rise in broader market due to positive global cues helped most of these stocks pare some of their losses.
In fact, at the close of trade, two of Adani group stocks Adani Green Energy Ltd as well as Ambuja Cement Ltd ended in green, by climbing 0.55 per cent and 1.12 per cent respectively.
However, the Hindenburg factor did weigh down the overall performance of the 10 Adani stocks, as they collectively lost ₹220.64 billion (£2.06bn) in market capitalisation.
At the close of trading Adani Enterprises ended with a loss of 1.09 per cent while Adani Energy Solutions closed 3.7 per cent lower.
Adani Wilmar had slumped 4.14 per cent over Friday’s closing price, while Adani Total Gas dropped by 4.03 per cent.
Adani’s media arm NDTV declined by 3.08 per cent, and Adani Ports dipped 2.02 per cent.
ACC ended with a loss of 1.55 per cent and Adani Power 0.65 per cent on the BSE.
The benchmark indices Nifty 50 and BSE Sensex ended the day flat, after swinging between losses and gains through the day.
Softer blow
Though these are early days, the latest Hindenburg report has not mauled the Adani stocks the way the first report, published on January 24, 2023, had done.
Hindenburg had last year accused the Adani Group of financial misconduct and stock manipulation and this sent the stock prices of Adani Group companies on a free fall.
The day the report became public, Adani Enterprises stock had dropped 70 per cent to a low of ₹1,017 and it wasn’t until May 23, 2024, that the stock fully recovered to its pre-Hindenburg report levels, according to LiveMint.
Adani Wilmar’s stock underwent a 50 per cent drop and still not fully recovered. Even at last week’s close it was trading at ₹385, whereas prior to the Hindenburg hammering it was valued at ₹573.
Adani Power and Adani Ports have recovered from the first Hindenburg report blow and then made substantial gains. Both have doubled their value from pre-Hindenburg days.
Adani groups energy stocks – Adani Energy Solutions and Adani Green Energy made sluggish recoveries. Adani Energy Solutions is still trading 60 per cent below the pre-Hindenburg days, while Adani Green Energy recouped its losses after over a year.
The worst hit was Adani Total Gas, which had plummeted 83 per cent after the first report was published and is still 78 per cent below the pre-report levels.
