Adani stocks took a sharp beating on Friday, wiping out around Rs 4 lakh crore from the group's market capitalisation (m-cap) in just two straight sessions. The stocks cracked after a report by US-based short seller Hindenburg Research alleged that the Indian conglomerate had engaged in stock manipulation and accounting fraud scheme over the last few decades.
Following Hindenburg's claims, the combined m-cap of the Adani Group stocks tanked Rs 4.18 lakh crore to Rs 15.02 lakh crore from Rs 19.20 lakh crore on January 24.
Adani Group, however, said that Hindenburg published the report without making any attempt to contact them or verify the factual matrix. "The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India's highest courts," said Adani Group CFO Jugeshinder Singh.
On the stock-specific front, four (Adani Wilmar, Adani Power, Adani Total Gas and NDTV) out of 10 listed Adani Group companies finally settled at their respective lower price bands on BSE today. (10 listed Adani stocks include recently acquired ACC, Ambuja Cements and NDTV.)
Adani Green Energy closed 19.99 per cent lower at Rs 1,484.50 over its previous close of Rs 1,855.45, just shy of the lower circuit level of Rs 1,484.40. On similar lines, Adani Transmission ended 19.99 per cent lower at Rs 2,009.70, slightly above its lower price band of Rs 2,009.40.
Adani Group said that the timing of the Hindenburg report's publication "clearly betrays a brazen, mala fide intention to undermine the group’s reputation with the principal objective of damaging the follow-on public offering from Adani Enterprises, which is the biggest FPO ever in India."
The Rs 20,000-crore FPO hit Dalal Street today and it would remain open till Tuesday, January 31. The price band has been fixed at Rs 3,112-3,276, with a lot size of four equity shares.
Commenting on Adani Group stocks, Aamar Deo Singh, Head Advisory at Angel One, "The onslaught of the bears are in full force on the back of aggravated selling witnessed over the past two days post the release of the Hindenburg report. Given the way the market has reacted to this report, the stocks need to consolidate after this sharp correction, and one should wait for the return of normal volatility before entering."
"Adani stocks are likely to continue under pressure due to the fallout from the Hindenburg report. The elevated valuations of Adani stocks are a serious concern," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Echoing similar views, an industry source said, requesting anonymity, said that the valuation of Adani Group stocks is very high.
Meanwhile, Indian equity benchmarks plunged sharply today, dragged banks, financials and energy stocks. The 30-share benchmark BSE Sensex pack settled 874 points or 1.45 per cent lower at 59,331, while the broader NSE Nifty index moved 288 points or 1.61 per cent down to finish at 17,604.
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