Shares of Indian conglomerate Adani have slumped for a second straight trading day after US investor Hindenburg Research accused the company of market manipulation and accounting fraud.
Adani, one of India's biggest companies, has interests in power generation, ports, renewables, coal, gas and hydrogen, among other sectors. Shares of the group's flagship firm Adani Enterprises have fallen by 19pc since 25 January. The share price dropped by 16pc on 27 January to close at 2,768.50 rupees/share after the market returned from a holiday on 26 January. The company's other businesses and recent acquisitions have also under come under pressure.
The sell-off was sparked by a 24 January Hindenburg report that detailed an alleged web of offshore shell entities controlled by the Adani family in tax havens such as Mauritius, the UAE and the Caribbean, which the investor claimed facilitated corruption, money laundering, taxpayer theft and family members siphoning off money from the group's listed companies.
Hindenburg said it has taken a short position in Adani's companies through US-traded bonds and non-Indian-traded derivative instruments, which led to a sell-off in the Indian market.
Adani denied the allegations, describing the report as "a malicious combination of selective misinformation and stale, baseless and discredited allegations", and said it is considering taking legal action against Hindenburg. It accused the US firm of intentionally undermining the group's reputation and damaging a follow-on public offering (FPO) that started on 27 January, through which Adani Enterprises aims to raise Rs200bn to fund capital expenditure requirements and repay debt in some of its subsidiaries.
The FPO is targeting Rs50.79bn of funding for subsidiary Adani New Industries (Anil), which aims to build 3mn t/yr of green hydrogen capacity over 10 years including an initial 1mn t/yr at an investment of around $50bn (Rs4.07 trillion). French firm TotalEnergies bought a 25pc stake in Anil last year.
Any sustained loss of investor confidence in Adani could complicate India's ambitious expansion efforts in renewables, hydrogen and infrastructure. Adani has laid out plans to develop an end-to-end integrated ecosystem for the manufacture of low-cost green hydrogen, in line with the Indian government's national green hydrogen mission.
Adani is India's largest trading house for imported coal, and owns major coal mines in Australia and Indonesia. Its Adani Power arm is India's largest private-sector thermal power producer with an installed capacity of 12,450 MW across five states and a 40 MW solar power project in Gujarat.
Adani Total Gas is one of the country's leading private-sector developers of city gas distribution networks to supply piped natural gas to industrial, commercial and residential customers, as well as compressed natural gas to the transport sector.
The group's renewable energy arm, Adani Green Energy, has the world's largest operational hybrid power generation capacity at 1,440 MW. TotalEnergies bought a 20pc stake in Adani Green Energy in 2021, as well as a 50pc stake in the Indian firm's solar power assets, for a total cost of $2.50bn.
Adani was founded in 1988 as a commodity trading company. Forbes has listed its chairman, Gautam Adani, as Asia's richest man.
