The Adani Group took another blow on Monday, with the stock rout growing to $66 billion and its dollar bonds sold as the fight with short seller Hindenburg Research escalated.<\/p>\n
While the broad selloff continued with Adani Total Gas Ltd. and Adani Transmission Ltd. down as much as 20% again, there were signs of a divide emerging among traders. Adani Enterprises Ltd., the flagship of billionaire Gautam Adani, as well as Adani Ports & Special Economic Zone Ltd., rebounded following a rebuttal of Hindenburg\u2019s fraud allegations.<\/p>\n
\u201cThe initial reaction suggests the market is likely to reward Adani group companies with relatively better visibility of earnings and solid fundamentals such as Adani Ports, Ambuja and ACC,\u201d according to Bloomberg Intelligence analyst Nitin Chanduka. \u201cPost the sharp correction, valuations have cooled off and could offer attractive opportunities for long-term investors.\u201d<\/p>\n
The turmoil comes as Adani Enterprises seeks to complete a $2.5 billion share sale, with a tit-for-tat between the two coming fast and furious. Just before markets open, Hindenburg said a Sunday 413-page refutation by Adani to its report last week fails to answer most of its questions. The saga also threatens to weaken broader confidence in India, until recently a top investment destination for Wall Street, and accelerate a nascent shift toward a reopening China.<\/p>\n
Adani Enterprises rose 4.3% to 2,879.7 rupees as of 10:51 a.m. in Mumbai, still below the floor price it has set for its follow-on equity sale. The company is seeking to raise 200 billion rupees by selling shares in a price band of 3,112 rupees to 3,276 rupees.<\/p>\n
\u201cAdani Enterprises and Adani Ports are rebounding because they are the focal point for the group,\u201d said Sameer Kalra, founder of Target Investing in Mumbai. \u201cThe main recovery in Adani stocks has to first come in these stocks as they are flagship companies.\u201d<\/p>\n
Meanwhile, a decline in the dollar bonds of the Adani Group companies quickened on Monday. Adani Ports & Special Economic Zone Ltd.\u2019s 2027 note dropped 7.1 cents on the dollar to 72 cents in Hong Kong earlier, hitting a fresh low following an 11 cent tumble last week, Bloomberg-compiled data show.<\/p>\n
At least eight other Adani corporate bonds dropped by more than two cents on the dollar in volatile trading, as the value of the company\u2019s debt has plunged by hundreds of millions of dollars in less than a week.<\/p>\n
Tit-for-Tat<\/p>\n
In its rebuttal published Sunday, Adani said that some 65 of the 88 questions have been addressed in the conglomerate\u2019s public disclosures, describing the short seller\u2019s conduct as \u201cnothing short of a calculated securities fraud under applicable law.\u201d It reiterated it will \u201cexercise our rights to pursue remedies to safeguard our stakeholders before all appropriate authorities.\u201d<\/p>\n
The lengthy response comes in the last leg of a share offer by Adani Enterprises, which received overall subscriptions of 1% for the institutional and retail portions on Friday. While investors in Indian public offerings typically wait until the last day of the sale to place bids, there were concerns that Hindenburg\u2019s attack would sour sentiment.<\/p>\n
In the latest twist, Hindenburg then said Adani\u2019s rebuttal ignored all its key allegations and was \u201cobfuscated by nationalism.\u201d The conglomerate\u2019s statement failed to specifically answer 62 of Hindenburg\u2019s 88 questions, the short seller said Monday, and conflated the company\u2019s \u201cmeteoric rise\u201d and the wealth of Asia\u2019s richest man \u201cwith the success of India itself.\u201d<\/p>\n
\u201cAbout 70% of rebuttals are from prospectus disclosures, so nothing new to learn from it,\u201d said Deven Choksey, managing director at KR Choksey Holdings. Still, \u201cHindenburg must prove their allegations by testing them under Indian laws.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The Adani Group took another blow on Monday, with the stock rout growing to $66 billion and its dollar bonds sold as the fight with short seller Hindenburg Research escalated. While the broad selloff continued with Adani Total Gas Ltd. and Adani Transmission Ltd. down as much as 20% again, there were signs of a divide emerging among traders. Adani Enterprises Ltd., the flagship of billionaire Gautam Adani, as well as Adani Ports & Special Economic Zone Ltd., rebounded following a rebuttal of Hindenburg\u2019s fraud allegations. \u201cThe initial reaction suggests the market is likely to reward Adani group companies with […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-551091","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/551091","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=551091"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/551091\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=551091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=551091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=551091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}