New Delhi: After a volatile start Monday, the stock indices BSE Sensex and NSE Nifty 50 demonstrated resilience after Hindenburg Research accused the chairperson of India’s markets regulator of having investments in offshore funds linked to the Adani Group.
The BSE Sensex opened in the red at 79,330.12, while NSE Nifty 50 opened at 24,320.05. Both indices closed lower but with a decline of less than 1 percent, settling at 79,648.92 and 24,347, respectively.
“The Indian market concluded relatively flat, with its initial path being eclipsed by the continuation of the Adani-Hindenburg-SEBI saga. However, the market tried to brush away these noises, taking positive cues from global markets,” Vinod Nair, Head of Research at Geojit Financial Services, told ThePrint.
Nair attributed the market’s resilience to anticipated ease in Consumer Price Index (CPI) inflation and a good monsoon. He also noted that there are still upside risks due to firm oil prices and volatile food inflation.
However, Adani Group stocks took a significant hit following the allegations made Saturday.
Adani Group companies experienced a decline of up to 4 percent Monday, with Adani Wilmar being the biggest loser, dropping by 4.1 percent to close at Rs 369.35. Similarly, Adani Total Gas fell by 3.95 percent, Adani Energy Solutions by 3.25 percent, Adani Ports & SEZ by 2.33 percent, Adani Enterprises by 1.46 percent, and Adani Power by 1.21 percent.
Adani Green Energy was the only group stock that ended in the green, rising by 0.23 percent at Rs 1,785.
According to one media report, Adani Group investors lost approximately Rs 53,000 crore as the combined market capitalisation for 10 Adani Group stocks fell to Rs 16.7 lakh crore.
In a report published on its website, US-based short-seller Hindenburg Research alleged that Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (SEBI), along with her husband previously held investments in obscure offshore funds also used by the Adani Group.
The report mentioned the Bermuda-based Global Dynamic Opportunities Fund (GDOF), which the Financial Times said was used by entities connected to the Adani Group to trade in the shares of group companies. Citing whistleblower documents, Hindenburg claimed Buch and her husband invested in one of these sub-funds in 2015 and exited in 2018.
Hindenburg linked this investment to what it argued is the slow pace of action against the Adani Group and the offshore funds used by it. “We find it unsurprising that SEBI was reluctant to follow a trail that may have led to its own chairperson,” the short-seller stated in its report.
In response, Buch has said the investments were made in a personal capacity before she took over as the chief of SEBI and that all necessary disclosures had been made.
The IPE-Plus Fund 1, in which Buch invested, issued a separate statement asserting that it had not invested in any shares of the Adani Group. SEBI’s spokesperson reiterated Buch’s position and urged investors to remain calm and exercise due diligence before reacting to reports such as Hindenburg’s.
The Adani Group Sunday rejected the allegations and said its overseas holding structure was fully transparent.
Hindenburg’s report had last year sparked a $150 billion meltdown in the shares of Adani Group’s publicly listed companies.
(Edited by Nida Fatima Siddiqui)
Also Read: 9 months on, Hindenburg prediction of 85% fall in stock price proved right for just one Adani firm