Adani Group stocks hit lower circuits again; $108 billion shed in market value since Hindenburg report

Adani Group stocks hit lower circuits again; $108 billion shed in market value since Hindenburg report

Adani Group shares continued to see sell-off on Friday as stocks hit lower circuits on BSE. Adani Enterprises shares tanked 10% to hit the lower circuit in the morning trade. The stock hit an intraday low of Rs 1408 on BSE. The sharp fall in the share price for three consecutive sessions comes after the conglomerate cancelled its Rs 20,000 crore FPO. Adani Ports, Adani Transmission, and Adani Green Energy shares fell 10% to hit an intraday low of Rs 415.80 and Rs 1,401.5, and Rs 934.25 respectively. Adani Power, Adani Total Gas, and Adani Wilmar shares hit 5% lower circuit, and were trading at Rs 192, Rs 1625, and Rs 400.50 respectively.

Gautam Adani-led conglomerate came under fire from forensic financial research firm, Hindenburg Research, whose report alleged that Adani Group engaged in a “brazen stock manipulation and accounting fraud scheme over the course of decades”. It further said, “Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its 7 key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations.” Since the allegations, Adani Group companies have shed $108 billion in market value.

Dow Jones removes Adani Enterprises from sustainability indices

S&P Dow Jones Indices said it would remove Adani Enterprises from widely used sustainability indices with effect from February 7. This may make the Adani group share less appealing to sustainability-minded funds. In a brief note, S&P Dow Jones Indices said: “Adani Enterprises (XBOM: 512599) will be removed from the Dow Jones Sustainability indices following a media & stakeholder analysis triggered by allegations of stock manipulation and accounting fraud.” S&P Dow Jones Indices said it will make the changes to the Dow Jones Sustainability Indices, effective prior to the open on Tuesday, 7 February.

FIIs continue to sell Adani Group companies’ stocks

Foreign institutional investors have been reducing their stakes in Group firms for some time now. Foreign institutional investors (FIIs) have reduced their stakes in Adani Enterprises for seven consecutive quarters, from 20.51% in the March 2021 quarter to 15.39% in the three months ended December 2022. Similarly, FIIs pared their stake in Adani Green Energy for eight consecutive quarters, from 22.78% in the third quarter of 2020 to 15.14%. Adani Ports and Special Economic Zone and Adani Power saw a decline in FII stakes for the second consecutive quarter. Adani Total Gas and Adani Transmission saw a reduction in FII stakes for five consecutive quarters, to 17.25% and 19.32% in Q3 2022 from 18.89% and 21.05% in Q2 2021, respectively. The FII stake in newly listed Adani Wilmar also fell for the second consecutive quarter.