Hindenburg Research Group V/s Adani Group : After Effects of the Report


Hindenburg Research Group put forward an investigation report carried on by them for more than 2 years. In that report they have given their clarification about how Adani Group is involved in doing fradulent business. Alongside this the group is also a short seller and hence it has short sold the Adani Stocks as well. Since the day this claim has been made the Adani group is constantly getting a hit in their valuations. The company has been suffering from constant lower circuits in all of its stocks. 

Adani Group

The Adani Group has been going through a rough patch currently due to the effect of the Hindenburg research report. The report was not the only thing that hammered the Adani Stocks. Alongside this the group stocks kept as bond with Credit Suisse and CitiGroup have been termed as unacceptable. The bank’s claim that the bonds kept won’t be treated as collateral any longer and that money needs to be paid on its behalf. If not they will force their right to sell the bonds and hence the shares of Adani group would be further diluted. This has left the entire investor category of Adani Group stunned by how the company has been facing multiple attacks. The current situation of the stocks of the company is literally awful. 

Stock Valuations

Adani Enterprise, which is the main stock of the company, has suffered a loss of 2696 Rs from the all-time high. The current stock valuation is 1494 Rs against the all time high of 4196 Rs. This has been due to the constant lower circuits and the selling pressure on the stock.

Adani Ports which is one of the major revenue generating streams of the firm is also facing a heavy value loss. The all time high of this stock was 987 Rs and it has been brought down to 424 Rs currently. This stock has been volatile although it has ended multiple sessions into lower circuits. This signals strong recovery expectations in this stock on the primary phase of Adani Stock recovery.

Adani Green has lost more than 60% of valuation from the all time high. The share had an all time high of 3050 Rs and is currently trailing at 1039 Rs. This stock has experienced major turmoil just like Adai Enterprise as selling pressure in this company seems to rise everyday.

Adani Transmission was one of the major value gainers for the Adani Group in their bull run. However this Adani Bull has also suffered massive degradation. The 52 week high for this stock was 4236 Rs and the current valuation of the same is 1551 Rs. 

Adani Power is the most recent gainer in the list of Adani group of companies and has been the constant 5% lower circuit stock this time. The stock had achieved an all time high of 432 Rs a few months back. However currently it is valued at 202 Rs.

Adani Wilmar being the 2nd most consumed FMCG product in India had achieved a 52 week high of 878 Rs per share. However the current streak of lower circuits had rendered it to a valuation of 421 Rs per share.

ACC, Ambuja and NDTV have been the recent purchases of the company. However during their buying time, these stocks had a huge upside but in the current times they have been the victim of this downfall as well. The current valuation of NDTV is 223 Rs from 573 Rs, Ambuja is 352 Rs from 598 Rs and that of ACC is 1845 Rs from 2785 Rs.

What to Expect Further

In the times to come one cannot expect any quick recovery in these stocks as the Indian central Bank has also asked for the exposure of multiple banks towards Adani group in the recent times. Apart from this the FPO was called back by the group despite receiving the entire amount of subscription. This was on account of the massive devalution in Adani Enterprise share and the FPO price was more than 1000 Rs above the market valuation of the company in current times. With a huge exposure to scrutiny in current times the road ahead for Adani seems to be filled with lots of risks.

However the major hope is the support it received in the times of FPO. The company was falling short of the subscription amount and the FPO was only filled 3% by the end of day 2. However the big families of India like Reliance, Mittal showed their support and helped Adani Group to fully subscribe its FPO despite the ongoing scenario. Similarly LIC doubled up on its investment in the FPO when the Hindenburg research report was out. Hence the aid from the domestic players show support to the entire group which is the hope of recovery in the Adani Group currently.

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