Adani Group Shares Fall by 20% with FPO Opening to Low Price Band as Hindenburg Research Alleges Fraud

Adani Group takes a blow for its share prices going down by 20% after the Hindenburg Research points out years of fraud committed by the company.

Written by: Arjita Gupta

Edited by: Krutarth Ghosalkar

Last Updated: January 30, 2023

Adani Group companies took a hard fall with their shares up to 20% for the second straight session after an allegation from Hindenburg Research about fraud. Adani Ports shares dipped by 15% and shares of Adani Enterprises slumped by 10%. A 5% fall was seen for Adani Wilmar and Adani Power, while a 20% lower circuit was locked for Adani Transmission and Adani Total Gas.

The report revealed that Gautam Adani - the Chairman and founder of the Adani Group has accumulated around $120 billion of net worth over 3 years through stock price appreciation. After 2 years of intensive investigation and research, Hindenburg Research (a forensic financial research firm) came up with the report that led to the effect on the share prices of Adani group companies.

The research firm announced on its official Twitter channel that it has evidence that Adani Group, an Indian conglomerate has participated in stock manipulation over decades, an accounting fraud scheme of U.S. $218 billion or INR 17.8 trillion. The research also pinpointed that 6 of the listed companies of Adani Group in the said period, spiked at 819% on average.

Amidst the FPO (Follow-on-public-offer) opening for subscription at Rs. 20,000 crores, the shares price crashing for Adani Enterprise resulted in the FPO price band downing to Rs 3,112 to 3,276, as many feared that the FPO may not occur. The company gathers Rs. 6000 crores ahead of the FPO from anchor investors.

The company has allocated about 1.82 crore shares to 11 institutional investors at the cost of Rs. 3,276 per share in India’s biggest-ever FPO for retail investors. In the meantime, the Adani Group is looking at legal options against the ‘reckless’ attempt by the U.S. activist investor to sabotage the flagship firm, calling the report published as unresearched and maliciously mischievous.

The Hindenburg Research published the report on 24 January, which affected the investors and shareholders of the Adani Group. But the research firm maintained its stand for the publication and said that it will be meritless for the group to take any legal action and will ask the group in a legal discovery process to provide a long list of documents.

Source: Adani group share Gains