A lot has happened in more than a week since Hindenburg Research published its findings about the Adani Group. Until recently, Gautam Adani, the chairman and founder of Adani Group, was the richest Indian in the world. He has now gone down to the 22nd position on the list of Forbes billionaires. The shares of Adani Enterprises Ltd have also nosedived in the wake of Hindenburg Research’s report.
Based in New York City, Hindenburg Research LLC focuses on short-selling, using its activist shareholder position. Just when Gautam Adani was selling his flagship company’s fresh shares, Hindenburg Research published a 106-page report. It alleged that Adani Group was involved in accounting fraud, stock manipulation, and other forms of corporate governance misconduct.
The Adani Group published a 413-page response to this report. It said that the report was an unwarranted attack on the company, the quality, integrity, and independence of Indian institutions, and India’s ambition and growth story. Hindenburg Research rebutted the response saying that none of the substantive points in the report was addressed. Instead, the response had stoked a nationalist narrative.
Before Hindenburg Research’s report, the listed Adani companies had a combined value of US$ 218 billion. It has now slipped to US$ 108 billion. The S&P Dow Jones Indices stated that it would remove Adani Enterprises Ltd on February 7 from widely used sustainability indices. The report also forced Gautam Adani to withdraw the Follow-on Public Offer (FPO) of Adani Enterprises despite it being fully subscribed.
The Reserve Bank of India (RBI) has sought details from the lending banks about their exposure to the Adani Group. While Punjab National Bank and Bank of Baroda have disclosed their exposure to the group, the State Bank of India and other banks are yet to reveal their exposure officially.