Guwahati: Adani Enterprises, the Adani Group’s flagship company and Adani Ports saw a recovery versus the previous Friday closure despite a new denial from the US-based Hindenburg to the Indian conglomerate.
Other group companies, including Adani Transmission, Adani Green and Adani Total Gas, among others were however, trading negatively during the morning session.
Adani Enterprises’ stock rose 140 rupees or 5.10 percent to Rs 2,902.25 per share at 10:30 a.m. against its previous closing on Friday. The company suffered a loss of more than 15.20% the previous week.
At 10.30 in the morning, as the market opened with the weight of Friday’s loss, shares of Adani Port rose by Rs 22 or 3.70 percent to Rs 616.05. On Friday, the week’s session of the Sensex ended at 59,330.90 points, down 874.16 points or 1.45%, while the week’s session of the Nifty ended at 17,604.35 points, down 287.60 points or 1.61%.
The January 24 release of the Hindenburg Report which was harshly critical of the company caused a decline in the share price on Wednesday and Friday.
Hindenburg Research today said, “The Adani Group has attempted to conflate its meteoric rise and the wealth of its Chairman, Gautam Adani, with the success of India itself,”
This letter was released by the US-based short seller on Monday, hours after the Indian conglomerate declared in its response that the charges of stock manipulation made by the US-based short seller amounted to a “calculated attack on India.”
The reaction follows the publication of a lengthy 413-page report by Adani Group, which refuted all accusations made against it and referred to the Hindenburg report as “an attack on India and its independent institutions.”
Adani Green, a different company within the group also saw losses this morning as its shares dropped 16% to Rs 1,247.70 per share from their previous closing on Friday. Its shares dropped 37.92% in five days to Rs 1,233 per share this morning.
Adani Total Gas’ shares went down 20 per cent or Rs 585 to Rs 2,342.40 apiece in morning trade on Monday while the domestic market recovered after facing severe volatility in the beginning. Shares of Adani Transmission declined 20 per cent or Rs 402.80 to Rs 1,611.40 apiece against its previous closing on Friday. In a span of five days, it had gone down 41.42 per cent as the Hindenburg Research came out last week.
Explaining last week’s loss in equities, a market expert, Sunil Shah, said, “Markets opened in the negative territory today and Sensex was down by 500 points. But as on the expected lines, it recovered 300 points as we speak right now. On Friday, the markets had deep cuts, the reason was not due to weak fundamentals or corporates.”
On the Hindenburg report, he said, “There was this analyst company which came out with a damaging report on one of the leading companies of the country. That sent a panic trigger among the minds of the investors, and they were jittery and nervous. That is why we saw there was selling across the board.”
Continuing on this thread, the market expert said, “During the weekend, we saw some response from the particular Indian group against the report. Now, there is some sanity coming back to the market in the morning. Going forward, the markets will not react to niche issues but on strong underlying fundamentals of the corporates and the country.”
On the upheavals in the market last week, Sunil Shah also added, “The market fall is partly due to news making rounds in the media that the government might tweak the long-term capital gain tax structure. Nothing is official and everything is speculative. That also made investors nervous during last week.”