Adani Group stocks plunged in Wednesday's trade amid a report suggesting short-seller Hindenburg Research is holding short positions in the Adani Group stocks through US-traded bonds and non-Indian-traded derivative instruments.
Adani Group stocks were hit hard as Hindenburg Research's positions flagged risks to the financials of key companies. Key listed Adani companies have taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing, the report said.
Adani Ports plunged about 5 per cent to Rs 725 in Wednesday's trade, before making a mild recovery to Rs 731.05 level, as of 9.55 am. The scrip had settled at Rs 760.85 on Tuesday. The port and port services provider was trading 27 per cent below its 52-week high of Rs 987.90, hit on September 20, 2022.
Adani Enterprises plunged 3 per cent to Rs 3,357.10 during the session, ahead of its Rs 20,000 crore follow-on public offering (FPO), opening on January 27, 2022. Adani Group's flagship firm will sell shares in the range of Rs 3,112-3,276 with a lot size of 4 shares. Its anchor books open today.
Hindenburg, known for having shorted electric truck maker Nikola Corp and Twitter, questioned how the Adani Group has used offshore entities in offshore tax havens like Mauritius and the Caribbean Islands.
Adani Group's Chief Financial Officer, Jugeshinder Singh, said in a statement the company was shocked by the report, calling it a "malicious combination of selective misinformation and stale, baseless and discredited allegations."
"The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming follow-on Public Offering from Adani Enterprises," he added.
"The Group has always been in compliance with all laws," the executive said. He did not address specific allegations made by Hindenburg.
Among other Adani Group stocks, Adani Wilmar lost 4 per cent to Rs 551.35, whereas Adani Power also posted similar cuts to trade at Rs 264 on Wednesday. Gautam Adani's latest acquistion, New Delhi Television (NDTV), also slipped 4 per cent.
Adani Transmission and Adani Total Gas were down 3 per cent during the Wednesday's session. However, Adani Green Energy, the latest company of the group in terms of marketcap, shed 2 per cent.
Ambuja Cements plunged over 4 per cent to Rs 477.50, whereas ACC tumbled 3 per cent to 2264.55 during the trading session. Overall demand is expected to be healthy with Lok Sabha elections on the horizon as the Government would start doling out infrastructure projects, said Nirmal Bang Institutional Equities.
"With ACC and Ambuja Cements’ well-established brand value and experienced management at the helm of these companies, the Adani group will reap the benefits and will scale the business to new heights. Given the diversified nature of the Adani group, synergies are expected to materialise in the form of cost efficiencies aiding the profitability" the brokerage said.
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