After eroding investor wealth worth around $12.25 billion on Wednesday, the rout in Adani Group company stocks deepened on the second trading session on Friday, with share prices of some of the companies losing up to 20 percent in the morning trading hours on claims made in the Hindenburg report.
The report by Hindenburg, a US-based investment research firm with a focus on activist short-selling, claimed that the seven key listed companies of Adani Group are “85%+ overvalued even if you ignore our investigation and take the companies’ financials at face value”.
Adani Group stocks
The sell off continues amid the opening of the $2.45 billion follow-on public offer (FPO) of the Group flagship Adani Enterprises today.
Gulf sovereign wealth funds and financial institutions, including its strategic equity partner International Holding Company (IHC), were earlier reported to be among the likely investors in the Adani Enterprise FPO.
Abu Dhabi Investment Authority, ADQ, Qatar Investment Authority and Mubadala have been reportedly tapped for the FPO.
While all 10 Adani stocks were trading in the red zone, shares of Adani Total were the worst affected as they lost up to 19.6 percent of their market capitalization, followed by Adani Transmission which was trading 16 percent lower on Friday morning trading hours.
In a statement to Indian exchanges, Adani Group head of legal, Jatin Jalundhwala, called the Hindenburg report “maliciously mischievous, (and) unresearched”.
Hindenburg Research, however, responded to reports about Adani Group evaluating ‘remedial and punitive action’ against it, saying: “We fully stand by our report, any action against us will be meritless”.
The US firm said on Thursday it will demand documents in the legal discovery process if Adani Group files a lawsuit in the US against the short seller for its report on the Indian conglomerate.
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