Adani Group stocks lose up to 10% after Hindenburg reveals short positions

NEW DELHI: Ahead of the launch of the Rs 20,000 crore mega follow-on public offer (FPO) of Adani Enterprises, Adani Group shares lost up to 10% in Wednesday's trade after Hindenburg Research said it holds short positions in companies owned by billionaire Gautam Adani.

All 10 Adani Group stocks were in the red this morning with recent acquisition Ambuja Cements losing 9.6% to day's low at Rs 450.75. Shares of Adani Ports, the Group's cash cow, lost 7.2% to Rs 706.05. Shares of ACC, NDTV, Adani Transmission and Adani Power lost at least 5% each.

Adani Group's flagship Adani Enterprises lost up to 3.7% to day's low at Rs 3,315.7.

"We hold short positions in Adani Group Companies through US-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities," said Hindenburg, a US-based investment research firm with a focus on activist short-selling. ALSO READ

The Hindenburg report claimed that the seven key listed companies of Adani Group are "85%+ overvalued even if you ignore our investigation and take the companies’ financials at face value."

The release of the report comes just ahead of the Adani Enterprises FPO which opens on Friday and aims to raise Rs 20,000 crore to fund the Group's ambitious capex plans in green hydrogen, airports and greenfield expressway. Over Rs 4,000 crore of the funds raised from the FPO would be used to repay debt for Adani Airport Holdings, Adani Road Transport, and Mundra Solar.

Foreign investors including International Holding Co PJSC, Abu Dhabi Investment Authority, Mubadala Investment Co PJSC and BNP Paribas have made bids as anchor investors in the FPO, according to Bloomberg.

Earlier in August 2022, CreditSights, a fixed income research firm owned by financial services firm Fitch Group, had flagged concerns over the Group's debt which had risen to Rs 2.2 trillion in FY22-end.

Shares of Adani Enterprises surged 125% in 2022, while other group companies, including power and gas units, rose over 100%.

Despite the meteoric rise in Adani Group shares over the last few years, most of the counters hardly find any analyst coverage.

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