Adani Group market cap erodes $100 bn, but shares still higher than in 2021

Adani group stocks have been on a downward spiral with many of the stocks hitting lower circuit after lower circuit. The impact of the scathing Hindenburg report has led to a cumulative erosion of as much as $100 billion in market cap of the group companies. The report said that the group had manipulated stock prices and done accounting fraud for over decades. The Adani group has denied the allegations, threatened legal action and provided a 400 page rebuttal. However, Hindenburg research continues to stand by its report.

Since 24th of January, when the Hindenburg report was released, the Adani group stocks have been battered which also led to massive volatility in the broader stock markets. The report was released on the eve of the Adani enterprises 20,000 crore follow-on public offering. Despite the FPO being fully subscribed, the company called off the FPO citing ‘unprecedented circumstances’ and market volatility. In fact, for the first time amid the entire controversy, Chairman, Gautam Adani spoke out, saying that it wouldn’t be morally correct to proceed with the FPO.

But, let’s take a closer look at the way the Adani group stocks have moved. Since 25th January, the day after the report came out, 7 Adani group company stocks have fallen anywhere between 26% and 56%.
However, if we rewind back even to two years ago, majority of the stocks are still much higher.

In the latest developments, as per a Reuters report, the Reserve Bank of India has asked banks to provide details of their exposure to the Adani group.