The Adani Group faced another setback on Monday with its stock value dropping to $66 billion and bonds being sold. Adani Total Gas Ltd and Adani Transmission Ltd saw a decline of 20%, but some companies in the group, such as Adani Enterprises Ltd and Adani Ports & Special Economic Zone Ltd, showed signs of recovery after refuting fraud allegations by short seller Hindenburg Research.
Analyst Nitin Chanduka from Bloomberg Intelligence stated that market is likely to favor Adani group companies with a clearer earnings outlook and strong fundamentals like Adani Ports, Ambuja, and ACC, as valuations have cooled off and could become attractive for long-term investors.
The situation comes as Adani Enterprises aims to complete a $2.5 billion share sale, and tensions between the company and Hindenburg continue to escalate. Hindenburg said Adani’s 413-page response to the research firm’s report did not address most of their questions. This incident may weaken investor confidence in India and redirect investments to China.
Adani Enterprises shares rose 4.3% to 2,879.7 rupees, but still below the minimum price set for the share sale. The company aims to raise 200 billion rupees by selling shares in a price range of 3,112 to 3,276 rupees.
In a tit-for-tat move, Adani published a lengthy response on Sunday claiming that 65 of the 88 questions were addressed in public disclosures and called Hindenburg’s actions a “securities fraud”. Hindenburg countered that Adani’s response ignored its key allegations and was “obfuscated by nationalism”. The value of Adani Group’s bonds also continued to decline, with one note dropping 7.1 cents on the dollar to 72 cents.