One year of Hindenburg: Adani group up, recouping market cap losses

A year after the publication of a damaging report by US-based Hindenburg Research against the Gautam Adani-group, the conglomerate is up and running—recouping most of the market capitalisation losses, attracting investments from the world’s leading money managers, and almost escaping unscathed from the regulator.

However, the report hit the group hard, with the market value of the group companies plunging by 65 per cent, or Rs 12.4 trillion, from Rs 19.2 trillion to below Rs 7 trillion. The conglomerate also had to abandon a Rs 20,000-crore fresh share sale by flagship Adani Enterprises despite garnering full subscription. However, from the lows on February 27, 2023, the market value has bounced by more than two times.

The rebound has been underpinned by the group’s deleveraging efforts, which included a nearly $2 billion worth sale of promoter shares to the GQG Group in March 2023, providing a big sentiment boost to the beleaguered group. Another boost came from the Supreme Court, which refused to transfer the Adani probe to a Special Investigation Team (SIT) or the Central Bureau of Investigation (CBI), as it concluded that there had been no ‘regulatory failure’ from the market regulator.

The Securities and Exchange Board of India (Sebi) continues to investigate allegations made by Hindenburg against the group. It has concluded 22 of the 24 investigations. The pending probes are around alleged violations of minimum public shareholding norms.