Adani After Hindenburg 2.0

In the days following Hindenburg's second shot at Gautam Adani, this time with Sebi chief Madhabi Puri Buch in the mix, Adani stocks held steady. But the trust of institutional investors remains to be regained

- Ayaan Kartik

In January 2023, the Adani group was hit hard by a report from Hindenburg Research, a US-based short seller, accusing the conglomerate led by billionaire Gautam Adani of orchestrating “the largest con in corporate history”. The fallout was swift and severe: the group’s stocks plummeted by 50%, erasing $100bn in market value within just 10 days, and forcing the company to withdraw its Rs 20,000-crore follow-on public offer.

Fast forward 18 months, and Hindenburg released a second report, this time questioning the integrity of the ongoing investigation into Adani’s operations. Anticipation was high that the new allegations would once again send the group’s stocks into a tailspin. But reality has defied expectations. Ten days after the report’s release, Adani Enterprises' stocks dipped only about 3%. Unlike the first Hindenburg report, which disrupted the company’s financial plans, the second has so far failed to derail Adani’s fundraising efforts.

Minor Turbulence

In May 2024, Adani Enterprises’ board approved a Rs 16,600-crore qualified institutional placement (QIP), with media reports suggesting the QIP could hit the markets by September. The company is in the process of raising Rs 600 crore through public non-convertible debentures (NCDs), reports say. Despite the latest Hindenburg report, market analysts believe these fundraising plans are unlikely to be affected. Independent market analyst Ambareesh Baliga notes that the Adani group has likely reassured investors about regulatory concerns during prior discussions.