Seven Adani Group listed companies fell sharply after an activist US investment research and short-selling firm accused it of stock manipulation and accounting fraud.

Seven Adani Group listed companies fell sharply after an activist US investment research and short-selling firm accused it of stock manipulation and accounting fraud. (File photo)

By India Today Web Desk: Seven Listed Adani Group Companiesthe conglomerate owned by billionaire Gautam Adani, fell sharply on Wednesday after an activist US investment research and short-selling firm accused it of stock manipulation and accounting fraud.

While Adani Group released an official statement to refute the Hindenburg Research report, listed companies such as Adani Total Gas, Adani Enterprises, Adani Transmission, Adani Green Energy, Adani Ports, Adani Power and Adani Wilmar fell sharply in the range of 1 to 9 percent.

This indicates that the report triggered panic selling among investors. However, analysts quoted in various media questioned the timing of the Hindenburg report, released just ahead of Adani Enterprises’ FPO and said the market reaction seemed a bit too strong.

In an interview with Business Today TV, Kranthi Bathini, Head of Equity Strategy, WealthMills recalled that about a year ago shares of Adani Group listed companies fell on similar reports, but added that shares “regained their strength” and had a “great rally”.

Like other analysts, Bathini also questioned the timing of the report. “I analyzed every point in the report, there are certain allegations made by Hidenburg. The points they mentioned…it’s not new or something that happened yesterday or today,” said Bathini.

“They could have put this report in the public domain months earlier. This moment is suspicious and as the Adani Group statement says, they mentioned that all these malicious rumors regarding the group, and they are sticking to their corporate governance,” he added.

Explaining the reason for the panic selling, he said: “As investors know, all Adani Group stocks are high beta stocks and their valuations still look odd. So whenever these kinds of allegations surface, stocks plummet.

Bathini said investors had no reason to panic. “Existing investors can keep their positions. They have nothing to fear. He further underlined the fact that the allegations made in the report have not been proven to date.

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What did the Adani group say about the Hindenburg report?

In an official statement, Adani Group refuted the short seller’s claims and questioned the timing of the report.

On behalf of the Adani Group, its Chief Financial Officer Jugeshinder Singh said: “We are shocked that Hindenburg Research released a report on January 24, 2023 without attempting to contact us or verify the factual matrix.

“The report is a malicious combination of selective misinformation and outdated, baseless and discredited allegations that have been tested and thrown out by India’s highest courts,” he said.

“The timing of the release of the report clearly betrays a brazen and mala fide intent to undermine the reputation of the Adani Group with the primary aim of damaging the upcoming follow-on public offering of Adani Enterprises, India’s largest ever FPO” , Singh added.

“Our knowledgeable and well-informed investors are not swayed by one-sided, motivated and unfounded dealings with vested interests.”

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