Adani Group, the Indian conglomerate that has been under scrutiny since a damning report by Hindenburg Research last year, faced another significant selloff on Monday. This latest drop comes after the U.S. shortseller accused the head of India’s market regulator of having ties to offshore funds allegedly used by the group.
By the close of trading, Adani companies had seen $2.43 billion, or 1% of their market value, wiped out. However, this was a notable recovery from earlier in the day when losses exceeded $13 billion.
The clash between Hindenburg Research and the Adani Group dates back 18 months when the shortseller accused Adani of improperly using tax havens—a claim the group has repeatedly denied. On Sunday, Adani reiterated that its overseas holding structure is fully transparent.
Hindenburg’s latest allegations, based on whistleblower documents, claim that Madhabi Puri Buch, the chair of the Securities and Exchange Board of India (SEBI) since 2022, has a conflict of interest in the Adani matter due to previous investments. Buch dismissed the claims as baseless, and SEBI issued a statement affirming that the allegations against the Adani Group had been thoroughly investigated.
On Monday, shares in Adani’s flagship company, Adani Enterprises, fell by 1.1%. Other companies in the group, including Adani Ports, Adani Total Gas, Adani Power, Adani Wilmar, and Adani Energy Solutions, saw declines ranging from 0.6% to 4.2%. In contrast, Adani Green was the only company to close higher, with a 1% gain.
“This is the second time such allegations have surfaced. There have been numerous investigations over the past year and a half, and this reaction is likely temporary. Things should return to normal,” said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities.
Despite the ongoing scrutiny, investments from Abu Dhabi-based International Holding and U.S. boutique investment firm GQG Partners have helped to restore some investor confidence. Since Hindenburg’s first report in January 2023, Adani Group’s share value losses have narrowed to approximately $32.5 billion from an initial $150 billion.
Buch described Hindenburg’s recent allegations as an attempt at “character assassination” following SEBI’s enforcement actions and a “show cause” notice issued to the shortseller for violating Indian regulations. A show cause notice indicates that disciplinary action may be taken if satisfactory explanations are not provided.
Looking ahead, Adani Enterprises is planning to launch a $1 billion share sale by mid-September, after previously shelving a record $2.5 billion offering in the wake of Hindenburg’s first set of allegations. Additionally, Adani Energy successfully raised $1 billion from U.S. investors and sovereign wealth funds earlier this month.