Bloodbath on Dalal Street, Adani stocks collapse

It was a bloodbath on Dalal street with the markets cracking under pressure of the Adani pack. The Adani group of companies went into a freefall today, on the back of the scathing Hindenburg report that accused Adani of corporate malpractice, stock manipulation and accounting fraud. A report, which Adani termed as ‘unresearched’ and ‘malicious’. The Adani group said it was exploring legal options against Hindenburg research.

The group CFO said that the ‘’timing of the report’s publication was a ‘’brazen, mala fide intention to undermine Adani Group’s reputation with the principal objective of damaging the follow-on public offering from Adani Enterprises’’.

This Hindenburg report was released just ahead of the Adani Enterprises FPO, which is the largest ever FPO in India. The follow-on public offering opened today to a muted start, receiving bids for Rs 3.63 lakh shares or 1% of the issue size of 4.55 cr shares.

However, responding to Adani, Hindenburg research stands by its report, saying “If Adani is serious, it should also file a suit in the US where we operate. We have a long list of documents we would demand in a legal discovery process’’.

Meanwhile, the capital markets regulator SEBI, will also study the Hindenburg report. A Reuters report says SEBI, in its ongoing preliminary investigation into the group’s offshore fund holdings, will also study the report. Incidentally, SEBI has also been named in the report as being aware of such malpractices

Both the Sensex and Nifty closed around 1.5% lower, with the stocks of the listed Adani group of companies seeing deep cuts. In fact extending their losses from Wednesday, trading was halted for some of the group’s stocks after they hit lower circuit.