Adani Doubles Down Against Fraud Allegations Ahead of Share Sale

  • The Adani Group on Thursday issued an 18-page presentation titled “Myths of Short Seller.”
  • It aimed to address some of Hindenburg’s allegations of market manipulation and accounting fraud.
  • Shares of listed Adani Group companies are extending steep declines on Friday, following the report.

The Adani Group on Thursday doubled down on its defence against a short-seller’s report which leveled allegations of “brazen stock manipulation and accounting fraud scheme” at the Indian conglomerate.

It issued an 18-page presentation titled “Myths of Short Seller,” which set out to address some of Hindenburg Research’s allegations. In the presentation, Adani said eight of its nine publicly listed companies are audited by major accounting firms and that Hindenburg’s allegations of fraud are “devoid of facts.”

The allegations in Hindenburg’s bombshell Tuesday report could not have come at a more inopportune moment for Adani group. 

 A secondary share sale of Adani Enterprises — the flagship business of the Adani business empire founded by Asia’s richest person, Gautam Adani, is currently underway. The sale plans to raise up to 200 billion Indian rupees, or $2.5 billion.

Bidding for the shares is open from Friday to next Tuesday for retail investors. But the anchor book has already been oversubscribed by up to two times, Bloomberg reported on Wednesday, citing people familiar with the matter.

On Wednesday, the Adani Group issued a strong statement against Hindenburg’s allegation, saying its report was “maliciously mischievous” and “unresearched.”

The conglomerate also said the timing of the report’s publication “clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming Follow-on Public Offering from Adani Enterprises, the biggest FPO ever in India.”

Hindenburg’s allegations would likely have “little impact” on the share sale “as the anchor book was already oversubscribed,” wrote Leonard Law, a senior credit analyst at Lucror Analytics, in a Thursday note seen by Insider. “The allegations will lead to some near-term reputational damage, though the longer-term impact could be minor,” Law added in the note published on the Smartkarma research platform.

Shares of Adani Group companies are taking a beating

On Friday, shares of Adani Enterprises were 15.4% lower at 3.42 a.m. ET, while shares of Adani Ports and Special Economic Zone were down 16%. Adani Green Energy and Adani Transmission shares both crashed to their daily lower limits of 20%.

Listed Adani Group companies already lost a collective $12 billion in market value on Wednesday and their losses on Friday brought the damage over two sessions to more than $50 billion, per Bloomberg. The Indian markets were closed Thursday for a public holiday. 

Jatin Jalundhwala, the legal head for the Adani Group, said in a Thursday statement the volatility Hindenburg’s report caused in the Indian stock markets “is of great concern and has led to unwanted anguish for Indian citizens.”

He said the company was considering legal action against the short-seller: “We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research.”

Hindenburg Research on Thursday tweeted that it stood by its report, and that it would “welcome” the Adani Group threats of legal actions. The tweet was posted just as the Adani Group was starting a call with its bondholders to defend the conglomerate’s position with the presentation, per Bloomberg.


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