In a fresh wave of uncertainty, shares of Adani Group companies witnessed a sharp decline, with losses reaching up to 7% as investors reacted to allegations leveled against SEBI Chief Madhabi Buch in the ongoing Adani vs Hindenburg controversy. This sudden dip led to a significant erosion of wealth, with investors losing approximately Rs 53,000 crore as the combined market capitalization of 10 Adani stocks plunged to Rs 16.7 lakh crore.
Adani Group’s Stock Performance
Adani Green Energy was among the hardest hit, with its shares plummeting by 7% to touch a day’s low of Rs 1,656 on the BSE before partially recovering later in the session. Other Adani Group companies also felt the heat, with Adani Total Gas and Adani Power shares falling by around 5% and 4%, respectively. Meanwhile, Adani Wilmar, Adani Energy Solutions, and Adani Enterprises were trading nearly 3% lower. On the Nifty index, Adani Ports shares dropped by around 2%, making it the second-biggest loser after Adani Enterprises, the conglomerate’s flagship entity.
The Allegations and Market Sentiment
The market turmoil was triggered by fresh allegations made in a report, which suggested that Madhabi Buch and her husband, Dhaval Buch, had stakes in offshore funds based in Bermuda and Mauritius. These funds were allegedly used by Vinod Adani, Gautam Adani’s brother, to amass and trade large positions in Adani Group shares. Although the Hindenburg report did not introduce new charges against the Adani Group, it raised concerns about SEBI’s ability to remain an impartial arbiter in the case.
The report has also reignited political debates, with opposition leaders calling for Buch’s resignation and demanding a Joint Parliamentary Committee (JPC) probe into the Hindenburg report. Despite these developments, Buch has categorically denied the allegations, and SEBI has issued a statement affirming that Buch has made all the necessary disclosures regarding her holdings and has recused herself from any matters involving potential conflicts of interest.
Market Analysts’ Perspective
While the allegations have stirred investor sentiment, market analysts have largely dismissed the report as sensationalism. Dr. V K Vijayakumar of Geojit Financial Services remarked, “It appears that this ‘revelation’ is unlikely to impact the market meaningfully. The buy-on-dips strategy, which has been effective throughout this bull run, is likely to work again.”
SEBI’s Ongoing Investigation
As the situation unfolds, investors are also keeping a close eye on the progress of SEBI’s investigation into the previous Hindenburg report from January 2023, which had accused the Adani Group of stock manipulation and other corporate governance issues. SEBI revealed that out of the 24 matters under investigation, one more was completed in March 2024, and the final investigation is nearing completion. The regulator emphasized the extensive scope of the investigation, including over 100 summons, 1,100 letters and emails, and the examination of more than 300 documents comprising around 12,000 pages.
Despite the sharp fall in Adani Group shares, the broader market impact has been relatively contained, with the Sensex trading 400 points lower. Market participants are advised to exercise due diligence and remain cautious in the face of such reports. As the situation develops, the completion of SEBI’s investigation will be a crucial factor for investors as they navigate the ongoing controversy surrounding one of India’s largest conglomerates.
