A month since Hindenburg report, Adani woes continue
3 min read . Updated: 24 Feb 2023, 05:57 PM IST
PremiumA month after Hindenburg research report alleged Adani Group of ‘stock manipulation and accounting fraud’, Gautam Adani has lost the title of being India's richest man and his company's market capitalisation has went below $100 billion. Know the major updates on Adani-Hindenburg row
All hell broke loose when the company of then India's richest man, Gautam Adani, was questioned in a US based short-seller, Hindenburg's report for “stock manipulation and accounting fraud over the course of decades" on January 24. Since, then a lot has happened in the Indian stock market that has changed the situation for Gautam Adani and his business. From losing the title of being India's richest man to witnessing an outflux of investment, a lot has changed for business tycoon Gautam Adani in a month.
In its report, Hindenburg claimed that Adani Group was involved in "brazen stock manipulation and accounting fraud scheme." Know about all the major events that have unfolded in one month in the Adani-Hindenburg row.
Timeline of Adani-Hindenburg row
-On January 24, Hindenburg released a research report on Adani Group, which claimed it of doing “stock manipulation and accounting fraud" for more than ten years.
-Claims made by the US-based short seller had a ripple effect throughout the Indian stock market that even dragged India's biggest insurance company, LIC, in the matter. According to reports, LIC had invested more than ₹30 crore in ten companies of Adani Group.
-Till 26 January, the huge sell-off in shares in Adani's firms led to the loss of more than $100 billion in market value as of Thursday, reported -Bloomberg news. Later, Index provider MSCI sought a response on Adani Group and associated securities after Hindenburg report.
-On January 27, Adani groups' wealth continued to plunge on the bourses. Its follow on public offer (FPO) was subscribed only by1 per cent on the day.
-On January 29, Adani Groups issued a 413 long page statement in reply of Hindenburg claims. In the response, the group called it an attach on India's growth story and its ambition.
-On January 30, Hindenburg called Adani's statement a failed attempt to address all the questions raised in its report. It rejected the Adani group's response and stood by its claims.
-On the same day, Abu Dhabi conglomerate International Holding Company(IHC) announced to invest $381.17 million in Adani Enterprises' follow-on public offer, reported Reuters on 31 January.
-On 31 January, Adani Enterprise FPO was fully subscribed.
-On February 1, as the report managed to garner global attention upon Adani Enterprise, Credit Suisse's private bank stopped its margin loans on Adani bonds. The Swiss lender's private arm announced to stop accepting bonds of Adani group as collateral for margin loans to its private banking clients. Similar to Credit Suisse's private bank, Citigroup Inc.'s wealth arm stopped taking securities of Gautam Adani's group of firms as collateral for margin loans.
-On February 2, Gautam Adani announced to scrap the follow-on-public offer(FPO) that was declared fully subscribed. He said in a video message that the group decided to call of the share sale to save its investors from market volatility.
-Gautam Adani's flagship firm's bonds plunged to extreme low levels in US trading.
-The Reserve Bank of India(RBI) sought details from banks on their exposure to the Adani Group, reported Reuters. The information asked by the RBI include details off collateral being used to back loans, and indirect exposures to banks.
-The Adani-Hindenburg row was also echoed in the parliament. The opposition created ruckus in the lower as well as the upper house of the parliament during its proceeding. The opposition demanded the formation of a Joint Parliamentary Committee(JPC) to probe into the matter.
-On February 9, MSCI said it is reviewing the free-float status of Adani group securities on the back of some concerns from various market participants. MSCI calculates free float-adjusted market capitalisation for each security.
-On February 10, Supreme Court agreed to hear a plea seeking a direction to the Centre to constitute a committe monitored by a retired apex court judge to inquire and investigate the Hindenburg Research report. The petition was listed before a bench headed by CJ DY Chadnrachud.
-On February 13, the Adani Group halved its revenue growth target for the next financial year, reported Bloomberg. The conglomerate reset its growth target between 15-20%, down from 40% growth that was originally targeted.
-On February 14, the centre responded to the apex court and said that it has no objections in setting up of a Supreme Court committee in the Adani-Hindenburg matter.
-On February 20, Adani loses its market capitalisation and it went below $100 billion. It tumbled over $135 billion since the release of the Hindenburg Research report in January. The Adani Group's mcap erorion reached to around $200 billion from the peak of $290 billion in September last year.
