Adani Group stocks staged a powerful rally on September 19, after the Securities and Exchange Board of India (SEBI) dismissed two major allegations brought by U.S. short seller Hindenburg Research in early 2023.
The market regulator announced late Thursday, September 18, that it found no evidence the conglomerate used related-party transactions to route funds into its listed companies, a central claim in Hindenburg’s explosive report.
Adani Enterprises Ltd. rose as much as 5.2%, its biggest single-day gain since August, while Adani Total Gas Ltd. surged over 13%, leading to broad-based gains across the group’s ten publicly traded firms.
“There was no violation of SEBI’s disclosure norms,” said board member Kamlesh C. Varshney.
Varshney explained that transactions involving Adicorp Enterprises, Milestone Tradelinks and Rehvar Infrastructure did not meet the definition of related-party dealings.
“The SEBI orders vindicate our stance that the group has always complied with Indian laws,” an Adani spokesperson said, calling the decision a “significant step toward restoring investor confidence.”
Relief for Adani After a Year of Turmoil
The regulator’s findings offer a much-needed reprieve for the ports-to-power empire, which lost more than $150 billion in market value following Hindenburg’s January 2023 accusations of large-scale stock manipulation and corporate fraud.
The short-seller’s report triggered a court-directed investigation, halted Adani’s debt-fuelled expansion, and sent shockwaves through global markets.
Although India’s Supreme Court in January 2024 ruled that no further local probes were required, SEBI’s detailed orders provide fresh validation for the company.
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Adani Group’s combined market capitalisation now stands around $156 billion, still below its $235 billion peak before the allegations, but analysts say the new ruling could help tighten the conglomerate’s bond spreads and attract fresh capital inflows.
“SEBI’s findings could lead Adani’s bond spreads to tighten slightly, though U.S. charges against Gautam Adani could remain an overhang,” noted Sharon Chen, a credit analyst with Bloomberg Intelligence.
Lingering U.S. Investigation
Despite the rally, tension remains as the Indian businessman and his companies continue to face scrutiny from the U.S. Department of Justice, which is investigating an alleged $250 million bribery scheme.
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Bloomberg News recently reported that efforts to resolve those charges have stalled, leaving a potential regulatory overhang for Asia’s second-richest man.
“Sebi’s findings could lead Adani’s bond spreads to tighten slightly, though U.S. charges against Gautam Adani could remain an overhang,” Sharon Chen, Bloomberg Intelligence Credit Analyst, said in a note.
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