India’s Adani conglomerate market losses have exceeded to over $100 billion on Thursday, which have snowballed since New York’s Hindenburg Research (a short-seller’s firm) published scathing report triggered market turmoil and led the company to cancel its public share sale.
Hindenburg Research alleging a two-year investigation, the report charged the Adani conglomerate with engaging in a “brazen stock manipulation and accounting fraud scheme over the course of decades.”
Adani Group on yesterday called off the share sale an IPO of $2.5 billion as a stocks rout sparked by Hindenburg Research.The withdrawl of Adani Enterprises share sale marks a dramatic setback for Adani.
Adani,however denied the accusations as “nothing but a lie” from the “Madoffs of Manhattan” in a 413-page riposte that failed to soothe skittish investor sentiment and rein in a rapid sell-off.
The short-seller’s allegation of stock manipulation has “no basis” and stems from an ignorance of Indian law. The group has always made the necessary regulatory disclosures, Adani Group added .Adani is now the world’s 16th richest, as per Forbes’ list, down from third rank last week.
“It is tremendously concerning that the statements of an entity sitting thousands of miles away, with no credibility or ethics has caused serious and unprecedented adverse impact on our investors,” the Adani response said, describing Hindenburg as an “unethical short seller.”
Hindenburg on Jan. 29 stated that the Adani commentary “predictably tried to lead the focus away from substantive issues and instead stoked a nationalist narrative, claiming our report amounted to a ‘calculated attack on India’.”
Intervention from Reserve bank of India
India’s central bank has asked local banks for the details of their exposure to the Adani conglomerate.It is estimated that Indian banks were exposed to about 40pc of the 2 trillion rupees ($24.53bn) of Adani group’s debt in the fiscal year to March 2022.
In a video address, Gautam Adani said the group’s fundamentals were “strong” and that it had an “impeccable track record of fulfilling” its debt obligations. He said the Adani Enterprise share issue was pulled to protect investors from losses — the stock had been trading well below the offer price since last week.