Adani Group stocks continue to fall; Adani Total Gas tanks nearly 20%

The Adani Group stocks continued to remain under pressure on Friday, falling up to 20% in morning trade, after the US-based investment research firm Hindenburg Research made damaging allegations.

Shares of Adani Total Gas plummeted 19.65%, Adani Transmission tumbled 19%, Adani Green Energy plunged 15.50%, and Adani Enterprises tanked 6.19% on the BSE.

Also, Adani Ports and Special Economic Zone fell 5.31%, Adani Wilmar dipped 5%, and Adani Power declined 4.99%.

In the broader market, the 30-share BSE benchmark plunged by 1,106 points or 1.84% to trade at 59,098.37 in the afternoon session due to heavy selling in financials, banking, oil, and IT stocks.

Led by Tata Motors and Bajaj Auto, the BSE Auto index bucked the trend and was the only sectoral index to trade in the green in the morning session.

Tata Motors was the lead gainer among Sensex shares rising by 5.14% as the automaker was back in the black in the December quarter after two years.

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Bajaj Auto jumped 6% while the BSE Auto index was marginally up at 29,619.19.

The Adani Group on Thursday said it is examining legal options to take "punitive action" against Hindenburg Research for its "reckless" attempt to sabotage a mega share sale at the conglomerate's flagship firm—a statement that the US activist investor responded by saying it stands by its report that alleged "brazen" market manipulation and accounting fraud by the group.

"The maliciously mischievous, unresearched report published by Hindenburg Research on January 24, 2023, has adversely affected the Adani Group, our shareholders and investors. The volatility in Indian stock markets created by the report is of great concern and has led to unwanted anguish for Indian citizens," Adani Group's lead head Jatin Jalundhwala said in a statement.

"The report and its unsubstantiated contents were designed to have a deleterious effect on the share values of Adani Group companies as Hindenburg Research, by their own admission, is positioned to benefit from a slide in Adani shares," he said.

"We are deeply disturbed by this intentional and reckless attempt by a foreign entity to mislead the investor community and the general public, undermine the goodwill and reputation of the Adani Group and its leaders, and sabotage the FPO (Follow-on Public Offering) from Adani Enterprises," he added.

"We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research."

Hindenburg, a US-based investment research firm that specialises in activist short-selling, said on Wednesday that its two-year investigation revealed that Adani Group has "engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades".

In response to Adani's statement, it said in a statement that Adani had not addressed the issues raised and had not answered the 88 questions asked.

On Adani's legal action, the research firm said it welcomed the move and if Adani should file suit, it should be in the US where Hindenburg operates.

It ended the statement by saying, "We have a long list of documents we would demand in a legal discovery process."

(Hindeburg's response to the legal action was added for context.)