The share prices of all nine listed companies of the Adani Group continued to tank on Friday, two days after a report by US-based company Hindenburg Research accused the conglomerate of stock manipulation and improper use of offshore tax havens.
According to The Indian Express, with some of the stocks of the group falling by as much as 20%, the nine companies have lost more than Rs 4.20 lakh crore in market capitalisation since the markets closed on Tuesday.
The sell-off had a broader impact on the Indian equity markets as investor wealth plummeted by more than Rs 12 lakh crore in just two trading sessions on Wednesday and Friday, the Business Standard reported. The markets were closed on Thursday on account of Republic Day.
In a report published on Wednesday, Hindenburg had claimed that key listed companies of the Adani Group are on a “precarious financial footing”. It also alleged that the conglomerate headed by India’s richest person, Gautam Adani, has amassed substantial debt by pledging overvalued shares.
The Adani stocks went on a spiral soon after markets opened for trading on Friday morning. At 3.25 pm, the group’s flagship company Adani Enterprises was down more than 18%. Adani Total Gas, Adani Green Energy and Adani Transmission were the worst performers as the stocks crashed by 20% each.
Adani Power (5%), Adani Ports (15.58%) and Adani Wilmar (5%) also faced significant losses. The overall 30-share BSE Sensex was down nearly 900 points, or 1.5%
Congress demands investigation
Meanwhile, the Congress on Friday demanded that the Reserve Bank of India and markets regulator Securities and Exchange Board of India should investigate into Hindenburg’s allegations against the Adani Group.
In a statement, Congress General Secretary in charge of communications Jairam Ramesh expressed concerns, pointing out that public sector financial institutions like the Life Insurance Corporation and the State Bank of India have exposure to the Adani Group.
Ramesh claimed that 8% of the LIC’s equity assets, amounting to Rs 74,000 crore, are invested in Adani Group companies. Moreover, 40% of the loans advanced to the conglomerate have been from the SBI, the Congress MP said.
“These institutions have liberally financed the Adani Group even as their private sector counterparts have chosen to avoid investing because of concerns over corporate governance and indebtedness,” the statement noted.
In his statement, Ramesh claimed that the Narendra Modi-led central government and the group of companies headed by Adani have a “close relationship”.
“For all its posturing about black money, has the Modi government chosen to turn a blind eye towards illicit activities by its favourite business group?” he questioned.
Hindenburg has put out a damning report on the Adani group which has reacted predictably. Here is my statement on this serious matter that requires a thorough investigation in the public interest. pic.twitter.com/gfmgmKPx4e
— Jairam Ramesh (@Jairam_Ramesh) January 27, 2023
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