The Adani-Hindenburg saga: A complete guide to what’s happened so far

Adani Group, however, has rejected the criticism and denied wrongdoing.

The Hindenburg report: How it all started

In late January, Hindenburg Research, which specialises in short selling, published a report critical of the group’s finances.

The research firm, which has short positions in Adani companies through US-traded bonds and non-Indian-traded derivative instruments, said key listed companies in the group had “substantial debt” which has put the entire group on a “precarious financial footing”.

The report was released just ahead of a Rs 20,000 crore (USD 2.5 billion) follow-on public offer (FPO) by Adani Group’s flagship firm Adani Enterprises.

Adani’s response

In a 413-page response, the Adani Group said, “This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.”

“It is tremendously concerning that the statements of an entity sitting thousands of miles away, with no credibility or ethics has caused serious and unprecedented adverse impact on our investors,” the Adani Group said.

Hindenburg’s rebuttal

Hindenburg, in its rebuttal, said the Adani response did not address any of the substantive points that the report raised. Rather, Adani has “stoked a nationalist narrative” that seeks to conflate the “meteoric rise and the wealth of its chairman, Gautam Adani, with the success of India itself”.

The outcome

In the wake of the report, Adani’s market losses have swelled over USD 100 billion. According to a report in Reuters, the listed Adani firms now have a combined market value of USD 108 billion, versus USD 218 billion before Hindenburg’s report.

Earlier this week, the Adani Group announced that it had decided to call off the Rs 20,000 crore FPO of Adani Enterprises Ltd (AEL) and said that it would refund the money to the investors.

S&P Dow Jones Indices on Thursday said it would remove Adani Enterprises Ltd from widely used sustainability indices on February 7, making the shares less appealing to environment-conscious investors.

RBI seeks details of banks’ exposure to Adani group

As the market continued to hammer its stocks, the Reserve Bank of India (RBI) has sought details from banks about their exposure to the group. Market regulator SEBI, however, has not announced any probe into the crash in Adani shares and the withdrawal of Rs 20,000-crore FPO.

While State Bank of India (SBI) is yet to officially disclose its exposure, sources said it could be over Rs 21,000 crore. Punjab National Bank (PNB) said its total exposure to the Adani Group of Rs 7,000 crore is backed by adequate cash flows and there is no worry on repayments at present. Bank of Baroda has an exposure of Rs 4,000 crore. Other banks have not yet disclosed their exposure.

Opposition demands JPC probe into Adani allegations

The Adani storm reached Parliament this week, with the Opposition joining hands to demand a probe either by a Joint Parliamentary Committee (JPC), headed by the Supreme Court or monitored by the Chief Justice of India, into the allegations of fraud and stock manipulation.

Govt responds

Union Finance Minister Nirmala Sitharaman said Friday that both LIC and SBI were not “over-exposed” (to Adani Group shares) and that “investors’ confidence” would endure in the market. Talking to reporters outside Parliament House, her colleague Parliamentary Affairs Minister Pralhad Joshi slammed the Opposition for disrupting Parliament proceedings over the Hindenburg report. “The government has nothing to do with it. There is absolutely no connection. Discussion on the President’s Address is the priority. They do not have any issue,” he said.