Adani stocks fall further on Hindenburg's allegations

Some of the companies saw 20% stock erosion on Friday

Shares of Adani Group’s companies have lost about Rs 3.6 lakh crore in market value after the worsening of a selloff triggered by US short seller Hindenburg Research’s report accusing the ports-to-power conglomerate of stock manipulation and accounting fraud.

The US firm also said earlier this week that it was shorting the Indian group's stocks. Shorting a stock is a bet that the share price will fall. All but one of the listed companies under the group led by Asia’s richest man Gautam Adani opened in the red on Friday. India’s benchmark S&P BSE Sensex Index lost more than 1 per cent to be the worst performer in Asia on Friday.

Also Read — What really worries Indians about Adani’s empire

Some of the group's stocks such as Adani Total Gas and Adani Transmission crashed as much as 20 per cent and 19 per cent respectively to hit their intraday low on the Sensex. The slump registered by Adani Power, Adani Wilmar, Ambuja Cement and NDTV even triggered their respective lower circuits, which meant that further stock trading would be frozen until there were no fresh buyers.

The slump in the group’s stocks came a day after the Adani group said it was exploring legal action against Hindenburg for its accusations. In response to this, the research firm stood by its report and said that it believed any legal action taken against them would be "meritless". "If Adani is serious, it should also file suit in the US where we operate. We have a long list of documents we would demand in a legal discovery process," it added in a tweet on Thursday.

On Friday, Hindenburg's report was also given a thumbs up by renowned American billionaire investor and hedge fund manager Bill Ackman.

"Adani’s response to @HindenburgRes is the same as @Herbalife’s response to our original 350-page presentation. Herbalife remains a pyramid scheme. I found the Hindenburg report highly credible and extremely well researched. @AdaniOnline response speaks volumes. Caveat emptor." Ackman said in his tweet.

Adani group has been considered to be close to the Narendra Modi-led administration in India and this has also invited responses from the opposition party.
Senior Leader of the Indian National Congress and a Member of Parliament Jairam Ramesh on Friday questioned the Modi government for turning a blind eye towards its "favourite business group".

Through a statement on Twitter, Ramesh also pushed key regulators such as the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) to intervene and do a thorough investigation to safeguard the country's financial stability.

(With Agency Inputs)