Adani Group: Eight out of 10 stocks hit lower circuits as short seller Hindenburg presses alarm button
Adani stocks cracked in Friday’s trade to hit lower circuit levels after US-based short seller Hindenburg Research launched a scathing attack on the group. Eight out of 10 listed Adani Group companies, including recent acquisitions of ACC, Ambuja Cements and NDTV, touched their respective lower price bands in afternoon trade. In response to the Hindenburg report, Adani termed the “allegations as baseless”.
Adani stocks, namely Adani Transmission, Adani Green Energy, Adani Wilmar, Adani Power and Adani Total Gas tanked up to 20 per cent to hit their lower circuit levels. In addition, shares ACC, Ambuja Cements and NDTV also tanked in a rub-off effect.
Only Adani Ports and Special Economic Zone and the group’s flagship Adani Enterprises traded close to their lower price bands of 25 per cent and 20 per cent, respectively. Adani Ports crashed 24.70 per cent to hit a day low of Rs 536.85, just shy of its lower circuit of Rs 534.70. Adani Enterprises nosedived 19.73 per cent to hit a day low of Rs 2,720.90, a little above than its lower price band of Rs 2,711.90.
“Adani stocks are likely to continue under pressure due to the fallout from the Hindenburg report. The elevated valuations of Adani stocks are a serious concern,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Echoing similar views, an industry source said, requesting anonymity, said that the valuation of Adani Group stocks is very high.
“Following the release of a study report by Hindenburg Research on Adani Group, Indian equities benchmarks are under intense selling pressure as the stock market chaos continues in the Adani Group,” said Santosh Meena, Head of Research at Swastika Investmart.
Hindenburg’s report alleging accounting frauds, stock manipulations and money laundering by the Adani group wiped out Rs 2.37 lakh crore from the group market capitalisation (m-cap) in just two days.
In total, the m-cap of 10 Adani Group stocks has declined 12 per cent to Rs 16.83 lakh crore from Rs 19.20 lakh crore as on January 24.
Adani group said that the timing of the Hindenburg report’s publication clearly betrays a brazen, mala fide intention to undermine the group’s reputation with the principal objective of damaging the follow-on public offering from Adani Enterprises, which is the biggest FPO ever in India.
The Rs 20,000-crore FPO hit Dalal Street today and it would remain open till Tuesday, January 31. The price band has been fixed at Rs 3,112-3,276, with a lot size of four equity shares.
Meanwhile, Indian equity benchmarks extended their losses for the second straight session today amid heavy selling in index heavyweights Reliance Industries, Adani Enterprises and Adani Ports.
Also read: Adani group debt: Here’s total exposure of PSU banks, private lenders in top 5 Adani firms
Also read: Hindenburg impact: 10 Adani group stocks lose Rs 2.37 lakh cr in market value in 2 days
