On Tuesday (5th December), Adani Group companies saw significant gains in the stock market after the US government declared that allegations of fraud by short-seller Hindenburg Research were “not relevant.” The trading session saw significant gains for each of the ten listed Adani Group companies.
When the market gained Rs 2.9 trillion, investors in Adani group companies gained Rs 1.9 trillion, the largest single-day increase in value for the infrastructure conglomerate. Adani Enterprises, the conglomerate’s flagship company, increased 17.38% to Rs 2,971 per share. It has emerged as the Nifty 50’s top gainer. Adani Ports and Special Economic Zone shares rose nearly 15% to Rs 1,010 per share.
Several other Adani Group stocks hit new highs, with Adani Green Energy, Adani Transmission, and Adani Total Gas all gaining 20% to close at Rs 1,084.40, Rs 1,348.50, and Rs 878.70, respectively.
The upward progress spread across the board, with Adani Power rising 15.33% to Rs 535.95, Adani Wilmar rising 9.99% to Rs 380.85, NDTV shares rising 18.11% to Rs 265.80, ACC shares rising 8.15% to Rs 2,184, and Ambuja Cements closing 6.94% higher at Rs 507.50.
Earlier in the day, the US government stated that allegations of corporate fraud levelled against Indian billionaire Gautam Adani, as asserted by short-seller Hindenburg Research, were irrelevant. Following a thorough due diligence examination of the Adani Group, the International Development Finance Corp (DFC) allocated approximately USD 553 million for a container terminal project in Sri Lanka.
The recent rally in Adani stocks was also triggered by the Supreme Court’s observation that it had no reason to doubt the Securities and Exchange Board of India’s (SEBI) investigation into the conglomerate. Following the conclusion of the hearing on Friday (24th November), the court reserved its decision on petitions in the Adani-Hindenburg case.
It remarked that it is easy to make allegations against anyone, adding that petitioners should show some responsibility while levelling charges against any party. The court observed that one doesn’t have to accept the Hindenburg report as correct as it is easy to make allegations and that it had no reason to doubt SEBI.
The bench led by the Chief Justice also pressed SEBI on its plans to protect investors from market volatility and short-selling. The court emphasized that forming a special investigation team (SIT) without sufficient evidence would be improper.
Notably, the share prices of the Group kept on inflating even on Wednesday (6th December). Adani Green Energy Ltd gained more than 19% to Rs 1605.65, bringing its total market capitalization to Rs 2.5 lakh crore. In the last three sessions, the stock has risen by more than 55%.
Adani Total Gas Ltd shares surged up to 18% to Rs 1033.75 on Wednesday (6th December), commanding a market capitalization of more than Rs 1.10 lakh crore. The stock is up 46% in three trading sessions after hitting an upper circuit of 20% in the previous trading session.
Adani Energy Solutions Ltd, formerly Adani Transmission, climbed more than 15% on the day to Rs 1246, bringing its total valuations closer to Rs 1.4 lakh crore. Adani Power Ltd, its utility arm, rose more than 9% to Rs 589.30, reaching a 52-week high and a total market capitalization of more than Rs 2.25 lakh crore.
Adani Enterprises Ltd, the flagship company of the Adani Group, rose about 7% in early trade to Rs 3,155, with a market capitalization of Rs 3.5 lakh crore. The blue-chip stock has gained more than 200% since its 52-week low, up 35% in the last three sessions.
In just two sessions on Tuesday (5th December), the ten listed Adani group companies gained 2.7 trillion, recouping a large portion of the losses sustained following the 24 January Hindenburg report, which accused the group of committing the largest corporate fraud in history.
Earlier this year, the Adani Group’s market value was reduced by around $100 billion due to Hindenburg Research’s sharp report.
According to a senior DFC official quoted in Bloomberg News, the allegations levelled by Hindenburg Research do not apply to Adani Ports & Special Economic Zone Ltd., the subsidiary leading the Sri Lankan initiative.
The DFC official, who chose to remain anonymous during the discussion of the negotiations, confirmed that the agency was satisfied and found no merit in Hindenburg’s allegations regarding Adani’s alleged corporate wrongdoing.