Decoding the Adani-Hindenburg Controversy And The Reasons Of Adani Group Shares Rise Following Supreme Court Verdict
The Inside Story
Last year in January 2023, Hindenburg Research, a US company, accused the Adani Group, a major Indian conglomerate, of financial tricks and also playing dirty games with their stocks. They had then claimed Adani was using tricky accounting, manipulating stock prices through foreign companies, and borrowing too much money. These accusations and allegations were probably made with the incitement and support of a few Indian Politicians in the Opposition and Opposition Political Parties.
The Hindenburg report caused a massive sell-off of Adani Group stocks, wiping out a whopping $140 billion within a few days as projected by some persons with vested interests. This chaos allegedly led to Adani Group canceling a planned ₹20,000 crore share sale due to the unstable market, this allegation remains unsubstantiated. As made out by some persons with vested interests it was projected that people had got upset and had asked the Supreme Court of India to step in for a fair investigation.
In March 2023, the Supreme Court formed a team of six experts, led by retired judge AM Sapre, to check if the stock market watchdog (SEBI) goofed up and if Adani Group broke any rules. In November 2023, the Supreme Court took more time to think about it.
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The Latest Buzz
On January 3rd, 2024, the Supreme Court finally took a call. They told SEBI to wrap up the investigation in three months. The Supreme Court said SEBI is the main player here and doesn't need a special team for this. However, they also said SEBI and the government should dig into Hindenburg's claim about Adani playing tricks with their stocks.
Adani Group Stocks Rise Post-Supreme Court Decision
After the Supreme Court's decision, Adani Group's stocks shot up:
Adani Enterprises, the top corporate entity, rose by over 20%, closing at ₹2,914.15.
Other Adani Group companies, like Adani Ports, Adani Power, and Adani Wilmar, also have seen significant gains.
Insights from the Money Minds
Analysts have some thoughts on why this happened:
Investor Relief: The Supreme Court decision has considerably eased investors' minds, providing clarity and reducing confusion.
SEBI's Credibility: Investors trust SEBI to conduct a fair investigation, making them feel more secure.
Potential Non-Issue: Most of them believe Adani Group might not be in as much trouble as initially thought, boosting confidence in their stocks.
Although the investigation is still underway, the stock market can be unpredictable as always. We just need to keep tabs as usual on how the situation unfolds and its expected impact if any on Adani Group's stocks. Stay tuned for updates!