The Battle for Truth: Adani vs Hindenburg Research Allegations

The Battle for Truth: Adani vs Hindenburg Research Allegations
The Battle for Truth: Adani vs Hindenburg Research Allegations

A company that began as a commodities trading business in the year 1988, and reached a total valuation of INR 24 Trillion (USD 280 billion) in November 2022, is the Gautam Adani-led Adani Group.

Founded as Adani Enterprises, its flagship company, the Adani Group has grown and is engaged in diverse businesses that include port management, electric power generation and transmission, renewable energy, mining, airport operations, defense and aerospace, rail and metro infrastructure, real estate, natural gas, food processing, financial services, and cement.  It is headquartered in Ahmedabad, Gujarat.

The flagship company Adani Enterprises is now a holding company that, by itself, primarily engages in the mining and trading of coal and iron ore.  It has three main subsidiaries namely Adani Wilmar, which is engaged in food processing, Adani Airport Holdings, engaged in airport operations and Adani Road Transport, engaged in road development. Adani Enterprises also acts as an incubator for the group’s new business ventures.

Steep Stock Fall – The Hindenburg Research Report
Adani Group Response
Hindenburg Research’s Response
About Hindenburg Research

Steep Stock Fall – The Hindenburg Research Report

Hindenburg Research's report
Hindenburg Research's report

On January 24, 2023, an investor research and activist short-seller firm based in the US, Hindenburg Research released a report that claimed that the Adani Group had allegedly engaged in market manipulation and accounting malpractices, over a few decades.  

They claimed to have found evidence in a two-year investigation that the group had taken a substantial amount of debt that included pledging shares of their inflated stock for loans.  Hindenburg Research claimed that this debt had risked the financial solidarity of the entire group.

This report by Hindenburg caused panic among domestic investors and led to a sharp fall in the Adani Group listed companies.  Group companies like Adani Total Gas, Adani Enterprises, Adani Transmission, Adani Green Energy, Adani Ports, Adani Power, and Adani Wilmar witnessed a drastic and sudden fall that caused a cumulative market capital loss of INR 1 lakh crore.

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Adani Group Response

A Tweet shared by Adani Group as a first response to the allegations
A Tweet shared by Adani Group as a first response to the allegations

Calling the report baseless and rubbish, the Adani Group questioned the timing of the report that was released only a few days before the Adani Enterprises FPO (Follow-on Public Offering).  

It released a 413-page long refutation statement, calling the Hindenburg report ‘A calculated attack on India, independence, integrity and quality of Indian institutions and growth story and ambition of India.’  

In a statement, Jugeshinder Singh, CFO, of Adani Group said – “We are shocked that Hindenburg Research published a report on January 24, 2023, without making any attempt to contact us or verify the factual matrix."

The report is a malicious combination of selective misinformation and stale, baseless, and discredited allegations that have been tested and rejected by India’s highest courts.

The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming Follow-on Public Offering from Adani Enterprises, the biggest FPO ever in India.

Our informed and knowledgeable investors are not influenced by one-sided,  motivated and unsubstantiated reports with vested interests, as clarified by Adani Group.

Market analysts have also questioned the timing of this report stating that many facts that are mentioned within these reports are already in the public domain and are unproven.  Singh had also recently proclaimed that five subsidiaries of the Adani Group will make their market debuts through IPOs (Initial Public Offerings) between 2026 and 2028.

The group also said in its Sunday rebuttal that 65 questions of the 88 raised by Hindenburg Research have been addressed by the company’s public disclosures. Jatin Jalundhwala, Head of Legal – Adani Group said – “We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research.”

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Hindenburg Research’s Response

Hindenburg Research's response
Hindenburg Research's response

On Monday, January 30, 2023, Hindenburg Research released its response titled – ‘Fraud cannot be obfuscated by the nationalism of a bloated response that ignores every key allegation we raised.’  

In a tweet that details its response to the Adani Group, it has reiterated that the group has not answered any questions raised by them.  Hindenburg has also claimed that any lawsuits filed against them will be ‘meritless’.

About Hindenburg Research

Founded in 2017 by Nathan Anderson, Hindenburg Research LLC., is based in New York City.  The company’s prime focus is on activist short-selling defending the practice as playing a key role in exposing fraud and protecting investors.

The company investigates and prepares a report on its target company in a period of six months or more by accessing its public records, internal corporate documents, and employee interviews.

These reports are then circulated to the company’s limited partners who together with Hindenburg Research take a short position in the target company.  In the event of the target company’s share decline, Hindenburg Research takes the profits.

Apart from the ongoing Adani Group feud, other companies like Nikola, Clover Health, Kandi, and Lordstown Motors have been subjected to such short-selling practices of Hindenburg Research LLC.

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As the story continues to unfold, the stock market continues to react to news updates from both sides.  It remains to be seen how the parties involved will proceed ahead.  The domestic share market will continue to ebb and flow in response to the actions from both sides.


Which is the biggest company of Adani?

The biggest company of Adani is Adani Enterprises Limited.

What is the reason for the fall of Adani shares?

Recently, a US-based short seller alleged the Adani group of stock manipulation and an accounting fraud scheme that resulted in the fall of Adani shares.

Is SEBI investigating Adani?

Yes, with the recent allegations and the fall in Adani shares, SEBI [Securities and Exchange Board of India] is investigating Adani shares closely.

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