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The Adani Group’s 413-page response to Hindenburg Research’s allegations gave some support to the flagship Adani Enterprises Ltd (AEL) shares that opened with sharp gains of upto 10 per cent before settling with modest gains of 4.8 per cent on Monday.
Three other Adani Portfolio companies, ports arm Adani Ports and Special Economic Zone Ltd (APSEZ) ended flat at Rs597 mostly unchanged from previous close. Cement makers ACC and Ambuja Cements ended with gains of 1.3 per cent and 1.85 per cent respectively after gaining by 10 per cent in early trades. Market insiders believed the positive trend was due to the short coverings done in the F&O segment by the short-sellers.
Meanwhile, the erosion in stock prices pushed back the Group chairman and founder Gautam Adani from third spot to eighth in the World’s richest list. His personal Networth tumbled to USD 88.2 billion from over USD 120 billion a week ago.
Below FPO price
Despite the recovery from Friday’s rout, AEL ended at Rs 2892.85, which is 7-11 per cent below the ₹20,000-crore Follow-on Public Offer (FPO) Price band of ₹3,112 and Rs 3,276. During the early deal, the stock did hit a high of ₹3,038.35 and a low of ₹2,771.05. The counter saw heavy volumes of over 2 crore shares changed hands. AEL’s FPO that opened on January 25 for subscription for Anchor investors, will close for public on Tuesday. (January 31).
The FPO has so far been subscribed 0.1 times.
In the cash segment, Adani Power (APL), Adani Green Energy (AGEL), Adani Willmar (AWL), Adani Total Gas (ATGL), NDTV had only sellers on the counters on Monday. AGEL and ATGL lost 20 per cent, while the others hit 5 pee cent lower circuit. Adani Transmission (ATL) fell by 15 per cent from Friday’s close.
The broader market remained under pressure with benchmark Nifty and Sensex trading marginally positive with gains of 0.25 per cent and 0.29 per cent respectively.
Adani’s response
On Sunday late evening Adani Group issued a point-by-point response to the Hindenburg Research’s allegations made in a report, as “false narrative written with a malafide intent”.
Hindenburg, on January 25, had released the report alleging Adani for stock manipulation, lapses on corporate governance and financial management. The US-based short seller had sought answers from Adani on 88 pointed questions.
In its response, Adani said “Sxityfive of these relate to matters that have been duly disclosed by Adani Portfolio companies in their annual reports available on their websites, offering memorandums, financial statements and stock exchange disclosures from time to time. Of the balance 23 questions, 18 relate to public shareholders and third parties (and not the Adani portfolio companies), while the balance 5 are baseless allegations based on imaginary fact patterns.” It also termed such a report as a “calculated attack on India”.
Hindenburg firm on report
Meanwhile, early on Monday, in a tweet, Hindenburg, countered Adani’s responses saying “Fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation we raised.” Hindenburg said that it stands by its report last week that alleged that the Adani Group “engaged in brazen stock manipulation and accounting fraud scheme” for decades.
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