By Kashish Tandon
(Reuters) – Adani Group stocks rose between 0.2% and 8.4% on Friday, a day after India’s markets regulator dismissed parts of short-seller Hindenburg Research’s stock manipulation allegations against billionaire Gautam Adani and his conglomerate, signalling a potential end to the group’s regulatory troubles.
While the Securities and Exchange Board of India (SEBI) has cleared two charges against Adani group firms, other orders are pending.
Adani Total Gas led gains among the nine entities with its 8.4% climb and was set for its best day in more than four months, while flagship Adani Enterprises rose 4.2%.
Adani Power climbed 7.4%, with Morgan Stanley starting its coverage on the stock with an “overweight” rating.
The SEBI launched its probe in 2023 after U.S.-based Hindenburg accused Adani Group of using tax havens and concealing related-party transactions.
In its order, SEBI said the transactions between Adani group companies and companies flagged by Hindenburg could not be called related-party transactions and therefore did not violate regulatory norms on disclosures or constitute market manipulation.
“This (SEBI order) signals an end to the allegations that have tainted the company’s image and stock price,” said Deven Choksey, managing director at DRChoksey FinServ.
The charges, which the conglomerate had denied, however, wiped $150 billion off the group’s market value at the time, though some of its stocks have since rebounded.
“Investors had quickly reacted to the Hindenburg report without dipping into the data of the company’s financials,” Choksey said.
Adani Ports rose 1.4%, while Adani Green and Adani Energy Solutions rose 3% each.
Adani Enterprises and Adani Ports were the top two percentage gainers on the benchmark Nifty 50 which is trading 0.4% lower.
“The regulator’s decision removes a significant overhang and is likely to bolster institutional investor confidence in Adani Ports,” said ICICI Securities in a note.
Three of the group entities – Adani Power, Adani Ports and Ambuja Cement – have recovered losses triggered by Hindenburg report and are up 17%, 89% and 145% since then.
Adani Enterprises, which had plunged about 70% to a two-year low within just seven days after the report, briefly erased the losses in June last year, but currently remains 28% below pre-Hindenburg levels.
Other group stocks are down between 20% and 80% since the Hindenburg report.
(Reporting by Kashish Tandon and Anuran Sadhu in Bengaluru; Editing by Harikrishnan Nair and Nivedita Bhattacharjee)
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