Adani Group and Hindenburg case: Stocks of Adani Group companies fell sharply on Wednesday after Hindenburg Research published its report. 

After New York-based investor research company Hindenburg Research, which specialises in short selling, accused industrialist Gautam Adani’s companies of “brazen stock manipulation and accounting fraud scheme over the course of decades,” shares of the Adani Group companies saw a loss in market value of more than Rs 80,000 crore on Wednesday.

Hindenburg accused Mr. Adani with “performing the greatest con in corporate history” in its investigation. This occurred days before the proposed public offering of Adani Group shares.

Adani Airport Holdings, Adani Road Transport, and Mundra Solar’s debt will be repaid with more than Rs 4,000 crore of the proceeds from the FPO.

As anchor investors in the FPO, foreign investors International Holding Co PJSC, Abu Dhabi Investment Authority, Mubadala Investment Co PJSC, and BNP Paribas have submitted bids.

The group’s debt had increased to Rs 2.2 trillion at the end of FY22, prompting Credit Sights, a fixed income research company owned by financial services company Fitch Group, to raise concerns earlier in August 2022.

In 2022, Adani Enterprises’ shares increased by 125%, while those of other group firms, such as the power and gas units, increased by over 100%.

A report claims that four of Adani’s listed firms are on the verge of delisting because of significant promoter ownership. Five of the group’s companies, all bar Adani Ports and Adani Wilmar, have current ratios below 1.0, according to the report, which raises the risk of short-term liquidity.

In India, publicly traded firms are subject to regulations requiring the disclosure of all promoter holdings. To prevent insider trading and manipulation, regulations additionally mandate that non-promoters hold at least 25% of the float in listed businesses.

Adani Transmission, Adani Power, Adani Total Gas, and Adani Enterprises all indicate that over 72% of their shares are held by insiders. Adani Wilmar, a newly formed business, must also lower its insider holdings to 75% from their existing level of 87.94%.

The study said that “our research shows that offshore shells and funds linked to the Adani Group represent several of the largest “public” (i.e., non-promoter) holders of Adani shares, a problem that would subject the Adani firms to delisting were Indian securities regulator SEBI’s guidelines followed.”

” Many of the so-called “public” funds,” it continued, “display flagrant irregularities, including (1) Mauritius or offshore-based entities, frequently shells; (2) beneficial ownership concealed through nominee directors; and (3) little to no diversification, holding portfolios almost entirely composed of shares in Adani listed companies.”

According to the report, some of the group’s listed firms are overleveraged compared to industry norms: “Four of seven of these entities have negative free cash flow, indicating that the issue is becoming worse.” The “current ratio” of a corporation is a calculation of liquid assets minus short-term liabilities. With the exception of Adani Ports and Adani Wilmar, all five of the group’s companies have current ratios below 1.0, raising the risk of short-term liquidity, the report added.

The research questioned the Adani Group’s ownership of businesses in regions known as offshore tax havens, including the Caribbean and Mauritius. Additionally, it asserted that “significant debt” held by Adani entities put the entire company on “precarious financial footing.”

Stocks of Adani Group companies fell sharply on Wednesday after investment research firm Hindenburg Research published a report alleging that the conglomerate had “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.” This was just days before Adani Enterprises offered $2.5 billion worth of shares.

As stated in the paper, Hindenburg Research has “taken a short position in Adani Group Companies through U.S.-traded bonds and non-Indian traded derivative instruments.” The study was released just two days before the flagship Adani Enterprises follow-on public offer, which would be worth Rs 20,000 crore and open for subscription on January 27, is due to begin.

According to Reuters, Jugeshinder Singh, the Adani Group’s Chief Financial Officer, expressed dismay at the study and described it as a “malicious combination of selected falsehoods and stale, unsubstantiated, and debunked charges.”

Hindenburg has a history of exposing corporate wrongdoing and betting against the companies.

The research company left 88 questions for the Adani Group at the end of its report. They include inquiries about Adani’s offshore firms and the reason for its “complicated, interconnected corporate structure.”


Hindenburg Research is a forensic financial research company that examines equity, credit, and derivatives. It was founded in 2017 by Nathan Anderson. Hindenburg claims on its website that it searches for “man-made disasters” such as accounting irregularities, poor management, and hidden related-party activities. The business makes its own investments. 

According to the company, it looks for “accounting irregularities; bad actors in management or key service provider roles; undisclosed related-party transactions; illegal/unethical business or financial reporting practices; and undisclosed regulatory, product, or financial issues” in businesses. It also claims that it believes the “most impactful research results from uncovering hard-to-find information from atypical sources.”

It was given that name in honor of the notorious 1937 airship tragedy known as the Hindenburg, which caught fire as it crashed into New Jersey. Following the discovery of potential misconduct, Hindenburg often produces a report outlining the case and places wagers against the target corporation in an effort to benefit.


Nathan Anderson began his career in finance with data provider FactSet Research Systems Inc., where he worked with investment management firms after graduating from the University of Connecticut with a degree in international business.

In 2020, he told the Wall Street Journal (WSJ), “I realised they were performing a lot of routine analysis, there was a lot of homogeneity.” He had previously worked for a brief period in Israel as an ambulance driver. On his LinkedIn profile, the short seller writes that the event helped him “think and act under great pressure.” Anderson has cited Harry Markopolos as his role model, the analyst who was the first to call attention to Bernie Madoff’s Ponzi scheme.


The bet that Hindenburg is best known for making against the manufacturer of electric trucks, Nikola Corp., in September 2020 resulted in “a significant win,” he told the WSJ, failing to provide an exact figure.

According to the short seller, Nikola misled investors over its technological advancements. Anderson disputed a Nikola video that appeared to show its electric truck driving rapidly when, in reality, the truck was being rolled down a slope.

Last year, a U.S. jury found Nikola’s founder, Trevor Milton, guilty of fraud on charges that he misled investors. In 2021, the firm decided to settle with the US Securities and Exchange Commission over its statements to investors by paying $125 million. In June 2020, Nikola made its debut as a publicly traded business. A few days later, it surpassed Ford Motor in terms of valuation, reaching $34 billion. It is currently valued at $1.34 billion. Whistleblowers and former employees, according to Hindenburg, assisted with its research.

Other names mentioned in the track record include WINS Finance, which Hindenburg revealed had failed to disclose to US investors an RMB 350 million asset freeze imposed on one of its subsidiaries in China; the “zombie company,” China Metal Resources Utilization; and a whistleblower report Anderson submitted to the US Securities and Exchange Commission. These companies all had a “100% downside” and were “under severe financial distress” with “numerous accounting irregularities.”


Since 2017, at least 16 companies have received warnings from Hindenburg, according to the company’s website. It acquired a short and subsequently a long position in Twitter Inc. last year. In May, Hindenburg said that it was short because it thought Elon Musk’s $44 billion plan to take the firm private may be renegotiated at a cheaper price if he decided not to proceed. Anderson disclosed a “large long position” in July.

Adani Group and Hindenburg case: Shares of Adani Group fall after the Hindenburg report

A US investment research and activist short-selling business accused the Adani Group, the conglomerate headed by billionaire Gautam Adani, of stock manipulation and accounting fraud on Wednesday, causing a steep decline in seven of its listed firms.

Adani Group officially responded to the Hindenburg Research research with a statement, but listed companies like Adani Total Gas, Adani Enterprises, Adani Transmission, Adani Green Energy, Adani Ports, Adani Power, and Adani Wilmar experienced a steep drop of 1–9%.

The benchmark Sensex closed 1.27 percent, or 774 points lower, at 60,205.06, and the NSE Nifty Index dropped 226 points to conclude at 17,891.95 as overall selling by foreign and local investors weighed on market sentiment. Adani Group shares fell by up to 8%.

This suggests that investors began selling in a panic as a result of the news. Nevertheless, analysts cited in a number of media outlets questioned the timing of the Hindenburg analysis, which was published immediately before Adani Enterprises’ FPO, and claimed that the market response appeared a little excessive.

Kranthi Bathini, Director, Equity Strategy, at WealthMills, recalled that shares of listed Adani Group companies fell on related stories about a year ago, but noted that the equities “regained their power” and have had a “huge rally” since then.

Bathini questioned the timing of the report in the same way as other analysts. “I examined every issue in the study, and Hidenburg made some claims,” the author said. The issues they raised are not brand-new or anything that just occurred yesterday or today, according to Bathini.

“They could have made this study available to the public months earlier. The timing is odd, and according to the Adani Firm’s statement, they keep to their corporate governance and indicate that all of them are unfounded rumors regarding the group.

He stated, “As investors are aware, all the Adani Group shares are high beta equities, and their valuations always look weird.” This is the cause of the panic sales. Therefore, the stocks fall anytime these kinds of claims are made.

Investors have no cause for concern, according to Bathini. Existing investors are allowed to keep their positions. There is nothing to worry about for them. He emphasised once more that the claims made in the study have not yet been supported by evidence.

Market analysts claim that after nervous investors sold down Adani Group equities as a result of the Hindenburg Research report, sentiment suffered. In just one day, the market value of the Adani Group decreased from Rs 80,078 crore to Rs 18,37,978 crore. Adani Transmission fell by 8.06%, ACC by 7.11%, Ambuja Cements by 6.83%, Adani Port by 6.03%, Adani Power and Adani Wilmar by 5%, Adani Total Gas by 3.61%, Adani Green by 2.12%, and the flagship Adani Enterprises by 1.18%.

What did the Adani Group say in the Hindenburg report?

Adani Group disputed the claims made by the short-seller and questioned the timeliness of the study in a formal statement.

Jugeshinder Singh, the CFO of the Adani Group, expressed dismay that Hindenburg Research issued a report on January 24, 2023, without attempting to get in touch with us or confirm the factual matrix.

“The report is a spiteful blend of selective misinformation and stale, unsubstantiated, and disproven charges,” he added. “These allegations have been put to the test and dismissed by India’s highest courts.”

Singh went on to say that the timing of the report’s release “clearly exposes a brazen, mala fide purpose to destroy the Adani Group’s reputation with the primary objective of hurting the impending follow-on public offering from Adani Enterprises, the biggest FPO ever in India.”

“Our knowledgeable and informed investors are not persuaded by misleading, motivated, or unsupported reports with vested interests,” the statement reads.

However, Adani Group announced on Thursday that it was considering “punitive and corrective action” against Hindenburg Research in the US and India.

Adani said that the company had always complied with all laws.

According to Jatin Jalundhwala, group head of Adani’s legal team, “the volatility in Indian financial markets produced by the article is of significant worry and has led to undesired misery for Indian residents.”

As Hindenburg Research, by their own admission, is positioned to benefit from a decline in Adani shares, it is obvious that the report and its unsupported contents were intended to have a negative effect on the share values of Adani Group firms.

Adani Enterprises, the group’s flagship company, is slated to start selling its shares to the general public on Friday.

Political response

The report has prompted an immediate response from opposition leaders who have long claimed that Mr. Adani has benefited from his close relationship with Indian Prime Minister Narendra Modi.

Shiv Sena Leader and Member of Parliament Priyanka Chaturvedi tweeted, “Given that extensive research is in the public domain, it is vital that the government of India takes note of the charges made.”

Mr. KT Ramarao, a well-known politician from the south of India, urged the market watchdog and investigative agencies to look into the activities of the Adani Group.

However, experts believe that regulators won’t take any independent action.

“Only if a particular complaint is filed with the Security and Exchange Board of India, which oversees listed firms in India, will it take action.” “In this instance, there isn’t,” “said Shriram Subramaniam, founder and managing director of InGovern Research, a firm that offers guidance to investors on governance-related issues.

Many of the charges in the study have previously been the focus of regulatory review.

The BBC tried to reach the market watchdog but got no answer.

Although it looks like everything is in place for Adani Group to proceed with its $2.4 billion public share offering on Friday, Ambareesh Baliga, a financial markets analyst, warned that the allegations in the study might scare away some potential buyers.

However, the report’s long-term effects can be more severe for Adani Group.

In addition to Adani, there are “many worries about the integrity of the broader Indian market, which is trapped between the strains of financial globalisation and political nationalism,” according to Andy Mukherjee, a commentator for the news outlet Bloomberg.

Is the Security and Exchange Board of India waiting for a public outcry before intervening and cleaning up the market, he continued?

Adani group exploring legal options against short seller Hindenburg-

Hindenburg Research, which in a study pointed out debt and governance difficulties at the conglomerate, is being sued by the Adani Group under both US and Indian law. As a result, the value of the stocks of group firms fell by 85,000 crore on Wednesday.

According to a company statement on Thursday citing Jatin Jalundhwala, Group Head – Legal, Adani group, “We are assessing the appropriate measures under US and Indian legislation for remedial and punitive action against Hindenburg Research.”

Hindenburg asserted that its 129-page study was the product of two years’ worth of work, and its inquiries took them to a number of nations, including Mauritius, a known tax haven.

The Adani Group said in its statement that the purposefully deceptive, unsupported study released by Hindenburg Research on January 24 had a negative impact on the Adani Group, its shareholders, and investors. “The report’s impact on the volatility of the Indian financial markets is extremely worrying and has caused Indian residents unwarranted suffering,” it continued.

As Hindenburg Research, by their own admission, is positioned to profit from a decline in Adani shares, it is obvious that the report and its unsupported contents were intended to have a negative effect on the share values of Adani Group companies. According to the statement, “We hold short positions in Adani Group Companies through U.S.-traded bonds and non-Indian-traded derivatives, as well as other non-Indian-traded reference securities.”


1. What is the Hindenburg report on Adani?

According to the Hindenburg study, there is increased short-term liquidity risk for five Adani companies. According to a report published by Hindenburg Research, an investment research firm specialising in activist short-selling, four of Adani’s listed companies are on the verge of delisting due to significant promoter ownership.

2. What is a short selling strategy?

As a trading strategy, short selling involves borrowing shares of a stock and selling them in the hope that the price will fall. The investor can then repurchase the shares at the lower price, give them back to the lender, and pocket the profit. Compared to conventional “long” stock purchases, this trading approach is more risky.