Adani Enterprises up 6%, other Adani group stocks tank after Hindenburg Research says ‘fraud cannot be obfuscated by nationalism’

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Shares of Adani group companies were trading mixed on the Bombay Stock Exchange in Monday’s intra-day trade after the group, on Sunday night, issued a detailed rebuttal to the Hindenburg Research report. In its 413-page response the Gautam Adani led group said it was shocked and deeply disturbed to read the report published by the “Madoffs of Manhattan”. It further said the report by Hindenburg Research was nothing but a lie.
At 10:15 am, Adani Enterprises was trading up 6% at Rs 2915.59. Among group stocks, Adani Total Gastraded down 20 per cent on the BSE in the intra-day trade today, while Adani Green energy was down 13%. Adani Transmission was down 18.8% at Rs 1634. In the past one week, stock prices of these three companies have plunged up to 40 per cent. Meanwhile, Adani Power and Adani Wilmar were locked in the 5 per cent lower circuit on the BSE.
A scathing report by Hindenburg Research claims brazen stock manipulation and accounting fraud scheme by Adani Group led to a bloodbath at Dalal Street. Short seller Hindenburg accused Adani’s businesses of improper use of offshore tax havens and flagged concerns about high debt. The report comes ahead of the final few days of a $2.5 billion share sale by Adani Enterprises.
Adani Group issued a detailed response on Sunday, saying it complies with all local laws and had made necessary regulatory disclosures. The conglomerate said Hindenburg report, which it previously said was baseless, was intended to enable the U.S.-based short seller to book gains, without citing evidence.
While Hindenburg alleged key listed Adani companies had “substantial debt” which has put the entire group on a “precarious financial footing”, the Adani Group has repeatedly said its borrowings are manageable and no investor has raised any concern.
The report has, to date, led to Adani stocks suffering a $48 billion rout.
In response to Adani Group’s 413-page rebuttal of Hindenburg Research’s January 24 report, the US-based research firm on Monday said that the “fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation”. It said that Adani group “tried to lead the focus away from substantive issues and instead stoked a nationalist narrative”.
“This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” Adani had said. It also said that the answers to 65 of the 88 questions raised in the report are “already in public domain”.
“Of the balance 23 questions, 18 relate to public shareholders and third parties (and not the Adani portfolio companies), while the balance 5 are baseless allegations based on imaginary fact patterns,” it added.
Referring to India as a vibrant democracy and one with a bright future, Hindeburg’s response goes on to add that the country’s future is “held back by Adani Group.” It reads, “In short, the Adani Group has attempted to conflate its meteoric rise and the wealth of its Chairman, Gautam Adani, with the success of India itself. We disagree. To be clear, we believe India is a vibrant democracy and an emerging superpower with an exciting future. We also believe India‚Äôs future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation.”
“We also believe that fraud is fraud, even when it’s perpetrated by one of the wealthiest individuals in the world,” it said.
The Hindenburg group stated that of Adani’s 413 page response only “about 30 pages focused on issues related to our report.”
“The remainder of the response consisted of 330 pages of court records, along with 53 pages of high-level financials, general information, and details on irrelevant corporate initiatives, such as how it encourages female entrepreneurship and the production of safe vegetables,” it said.
The group said its report asked 88 specific questions of the Adani Group and in its response, Adani failed to specifically answer 62 of them. “Instead, it mainly grouped questions together in categories and provided generalized deflections”
“In other instances, Adani simply pointed to its own filings and declared the questions or relevant matters settled, again failing to substantively address the issues raised,” the Hindenburg group said.
“Many of our questions were focused on both the nature of these transactions and the lack of disclosure around the clear conflicts of interest involved…In its response, Adani did not seem to dispute the existence of these transactions and made no effort to explain their obvious irregularities,” the reply said.
The US-based short seller noted that the core allegations of its report – “focused on numerous suspect transactions with offshore entities – were left completely unaddressed.”
Hindenburg said, “We asked about the source of the billions of US dollars that have flowed from Vinod Adani-Associated Offshore shell entities through the Adani Group. Adani’s defence: “We are neither aware nor required to be aware of their ‘source of funds'”
“Example #1: A U.S. ~$253 Million Loan From a Mauritius Entity Where Vinod Adani Serves As a Director” and added, “Example #2: An Investment Of U.S. $692.5 Million From A Mauritius Entity Controlled By The Head Of The Adani Group’s Private Family Investment Office”
Hindenburg said, “Our report outlined numerous irregularities and connections between suspected offshore stock parking entities and Adani promoters, raising key questions about whether promoter holdings were fully disclosed. Adani’s response claimed it simply doesn’t know who its largest public holders are.”
The US firm also said, “On Adani’s legal technicality defense: It strikes us as obvious that Vinod Adani is a related party to The Adani Group.”
Hindenburg concluded that, “Adani’s response largely confirmed our findings and Ignored Our Key Questions. Disclosure: We Are Short Adani Group Through US-Traded Bonds And Non-Indian-Traded Derivative Instruments”
In a disclaimer the Hindenburg group claimed that it held short positions in Adani Group Companies through US-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities and the report relates solely to the valuation of securities traded outside of India.
With inputs from Agencies



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