Adani Group shares continue to fall despite reassurances from RBI

Gautam Adani. [File Photo]

New Delhi: Shares of most Adani Group companies fell further on Monday despite reassurances from Reserve Bank of India. This followed after a scathing report by Hindenburg Research triggered a rout in the conglomerate’s listed firms.

Adani Enterprises lost 4%, and Adani Transmission fell 10% in Mumbai’s morning session. Adani Green Energy, Adani Power and Adani Total Gas fell 5% each. Adani Port and Special Economic Zone bucked the trend and traded 2% higher, but they remained volatile, CNBC TV reported.

“There will be more volatility in India this year; hence the market is prone to a correction,” analyst Venugopal Garre wrote in a Monday note. “The best way to pick up such transactions is to look for arbitrages in implied growth.”

Earlier, the Reserve Bank of India said that “the banking sector remains resilient and stable,” citing its own assessment of the situation. It added that it will continue to monitor the stability of the industry.

“Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy,” the RBI said in a Friday statement. “Banks are also in compliance with the Large Exposure Framework (LEF) guidelines issued by the RBI.”

Anand Mahindra, the chairman of Mahindra Group, defended India’s economy despite the whirlwind of recent media coverage surrounding Adani Group.

“Global media is speculating whether current challenges in the business sector will trip India’s ambitions to be a global economic force. I’ve lived long enough to see us face earthquakes, droughts, recessions, wars, terror attacks. All I will say is: never, ever bet against India,” Anand Mahendra tweeted.

Earlier, a report titled ‘Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History’, questioned the accounting and corporate governance practices of Adani Group, and also raised the issue of heavy debt last week.

The report claimed that the Adani Group companies participated in a clear stock manipulation and accounting fraud scheme over decades. The report led shares of the Indian giant to go down.

The report was prepared after two years of research and investigation by this forensic financial research firm.

In an official tweet, Hindenburg Research earlier wrote, “Today we reveal the findings of our 2-year investigation, presenting evidence that the INR 17.8 trillion (U.S. $218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.”

The research alleges that Gautam Adani has managed to amass a net worth of nearly $120 billion, largely through stock price appreciation over the last three years.

It also alleges that the group’s seven key listed companies have spiked at an average of 819 per cent over the entire period.

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