More than three weeks after the release of a sizable report by U.S. activist short seller Hindenburg Research alleging widespread fraud and stock manipulations at India鈥檚 Adani Group, share prices of the conglomerate have not recovered. As of the close of markets on February 14, stocks of Adani Enterprises 鈥 the group鈥檚 flagship holding company 鈥 the day before Hindenburg鈥檚 publication.
The weeks since then have been tumultuous ones for Adani Group, with stock prices rising and falling 鈥 at one time peaking so quickly that trading was stopped. However, almost a month into the affair, it might be the case that some significant long-term damage has been done to the Adani share price.
Stocks of Adani Enterprises initially decreased in value slowly and then took a nose dive Friday in the week of publication. Over the weekend, the group鈥檚 chairman Gautam Adani issued a rebuttal, upon which the stock in question rose again the following Monday and Tuesday, the last two days of January. On February 1, Adani Enterprises said it was rescinding a follow-up public offer worth 20,000 crore Indian rupees ($2.4 billion). The company鈥檚 stock plummeted to new lows upon the announcement, falling to valuations as low as 46 percent of the January 23 stock price. On February 6, Adani Group announced the . Share prices recovered quickly upon the news 鈥 - but the momentum did not last, especially since media reported on February 8 that the company had faced a margin call on the loan, meaning that the grantee had called upon Adani to provide additional securities.
Gautam Adani has said the accusations made by Hindenburg Research were untrue and that they were a 鈥渃alculated attack on India鈥. Hindenburg has meanwhile answered that 鈥渇raud cannot be obfuscated by nationalism鈥. While the worst of losses and revelations might be yet to come in the saga, significant damage to Adani鈥檚 valuation could stick around. Also, Adani Enterprises the Dow Jones Sustainability Indices, stricken off the Credit Suisse, Standard Chartered and Citibank bond collateral lists while also having occupied the Indian Supreme Court and the UK鈥檚 Financial Conduct Authority in the past weeks.
