August 12, 2024
New Delhi, India
Adani Shares Crash
Shares of Adani Group companies faced significant declines on Monday after Hindenburg Research alleged that SEBI Chairperson Madhabi Puri Buch had a stake in offshore entities involved in a money siphoning scandal linked to the Adani Group. The fresh allegations have led to a sharp sell-off, with investors adopting a cautious approach.
Market Reaction: Adani Enterprises and Adani Ports were among the biggest losers in the Nifty 50, with Adani Enterprises falling by 3.09%. Adani Energy Solutions opened 17% lower on the BSE, while other Adani Group companies like Adani Power, Adani Green Energy, and Adani Total Gas saw declines of 4.98%, 6.96%, and 5.57%, respectively. Adani Wilmar opened 3.88% down, and NDTV shares plummeted by 11%.
Impact on Major Indices: Despite the significant drop in Adani Group shares, the overall impact on the broader market indices was limited. The Sensex dropped by 375.79 points, or 0.47%, and the Nifty declined by 47.45 points, or 0.19%, at the opening.
Hindenburg’s Allegations: On Saturday, Hindenburg Research, citing “whistleblower documents,” claimed that SEBI Chairperson Madhabi Puri Buch and her husband, Dhaval Buch, had stakes in obscure offshore entities allegedly used in the Adani money siphoning scandal. The allegations have intensified scrutiny on the regulatory body and its head.
Adani Group’s Response: The Gautam Adani-led Adani Group swiftly denied the allegations, labeling them as “malicious, mischievous, and manipulative.” The conglomerate reiterated that its overseas holding structure is fully transparent, with all relevant details disclosed regularly in numerous public documents. The group also emphasized that it has no commercial relationship with the individuals or matters mentioned in Hindenburg’s report, describing the allegations as a calculated effort to malign the company’s reputation.
Investor Impact: The latest allegations led to a significant loss for investors, with approximately Rs 53,000 crore wiped out from the market capitalization of 10 Adani stocks, which fell to Rs 16.7 lakh crore. Adani Green Energy was among the most severely affected, with shares dropping by 7% to a day’s low of Rs 1,656 on the BSE before partially recovering. Adani Total Gas, Adani Power, and Adani Wilmar also experienced notable declines.
SEBI Investigation and Investor Caution: Although Hindenburg’s recent report did not introduce new charges against the Adani Group, it alleged that SEBI Chief Madhabi Puri Buch and her husband had stakes in Bermuda and Mauritius-based offshore funds used by Vinod Adani, Gautam Adani’s brother, to amass and trade large positions in Adani Group shares. In the coming days, investors will be closely monitoring developments related to SEBI’s ongoing investigation into Hindenburg’s previous report from last year. SEBI has reassured investors, advising them to exercise due diligence before reacting to such reports.
The fallout from Hindenburg’s latest allegations has once again put Adani Group under pressure, leading to significant losses for investors. As SEBI’s investigation progresses, the market will be watching closely for any further developments in this ongoing controversy.
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