Shares of Adani Enterprises Ltd., the primary company of Indian billionaire Gautam Adani’s conglomerate, have fully recovered from the significant losses incurred due to a damning short-seller report released in early 2023. This rebound follows the conglomerate’s efforts to reduce debt and secure substantial projects.
The stock has regained over $30 billion in losses that were triggered by allegations from US-based Hindenburg Research in January 2023. The report accused the ports-to-power conglomerate of extensive corporate misconduct and share-price manipulation. The Adani group has consistently refuted these claims.
The flagship’s stock climbed 1.7% to 3,445.05 in Mumbai on Friday, nearly tripling since its lowest point in February 2023. The recent increase is driven by analysts’ expectations that the Enterprises’ stock will be added to the benchmark S&P BSE Sensex Index in June, which could attract passive investment flows.
Other Adani companies are engaging with global investors to secure new debt as the conglomerate continues its expansion into the cement and copper sectors. Besides Adani Enterprises, at least five of the ten listed Adani group stocks are now trading above their levels prior to the Hindenburg report.
“There are a handful of groups in India that can undertake big projects, and Adani Group has taken the leadership position,” said Abhay Agarwal, a fund manager at Mumbai-based Piper Serica Advisors Pvt. “Investors see this group as aligned with national policy, and with clear policy direction, we are witnessing a recovery.”
Adani Ports and Special Economic Zone Ltd
Shares of APSEZ Ltd. and A Power Ltd. have been top performers this year among the group’s companies, each gaining over 35%, while television broadcaster New Delhi Television Ltd. has lagged, dropping 5.5%.
Despite the recent rally in the conglomerate’s shares, allegations related to the group resurfaced during the final stages of the ongoing national elections in India.
Earlier this month, Prime Minister Narendra Modi made unsubstantiated allegations that the main opposition party had received illicit funds from billionaires Mukesh Ambani and Gautam Adani.
In January 2023, the Hindenburg report led to the company canceling a $2.4 billion equity offering, which was set to be India’s largest follow-on share sale, amid a stock crash that wiped out over $150 billion from the group’s market value at its peak. This also significantly impacted Gautam’s personal wealth and triggered regulatory investigations in India.
The group’s market value is now less than $30 billion away from its level before the Hindenburg report.
The initial phase of it’s stocks’ recovery began in March last year when star emerging-market investor Rajiv Jain’s GQG Partners purchased nearly $2 billion worth of shares in four group firms, including the flagship, from an Adani family trust. Jain continued to increase his holdings throughout 2023. The group also attracted investments from the Qatar Investment Authority and UAE-based International Holding Co.
