Adani’s rebuttal did not quite glare critics down1 min read . Updated: 31 Jan 2023, 12:48 AM IST
The group’s defence might have reassured investors over its solvency and legal run-ins but a sustained share slide reveals cues taken from how all the dots add up. Its FPO is still at risk
In a rear-guard move against US-based trader Hindenburg’s characterization of its business operations as a “corporate con" marked by “brazen stock manipulation and accounting fraud," the Adani Group on Sunday not only issued a lengthy rebuttal, but also invoked Jallianwala Bagh, the 1919 massacre of Indians by fellow citizens under British command. As an analogy for those inclined to buy a raft of charges rejected by Adani as a mala fide attempt to torpedo an ongoing share issue by Adani Enterprises Ltd (AEL), that bit was far too over-the-top to earn it any credit and is best treated as yet another flag-wave to secure brand appeal among investors who’d rather play nationalist than rationalist. The latter, after all, are aware that a market churn in stock ownership driven by diverse investor conclusions is vital for its price to reflect its value, just as short-sellers play a critical corrective role. After last week’s rout, AEL shares found some support to recoup some losses on Monday, although the stock still failed to reach the lower end of its follow-on offer’s price band by day-end. The firm’s public issue was thus still at risk of failure, with a cut-price relaunch a fallback option, unless institutional buyers (of big lots) find a motive to mount a last-day rescue. Either way, its fate should go by reason, not rhetoric.