Adani Group Stocks Surge Up to 10% as SEBI Clears Manipulation Allegations

Key Highlights

• Adani Group stocks rose to 10% on September 19 after SEBI’s clean chit.

• SEBI found no evidence of insider trading, market manipulation, or related-party fund routing.

• Hindenburg Research’s allegations of stock manipulation and fund flows were dismissed as unsubstantiated.

• The US short-seller had alleged the use of three firms as conduits, triggering a market crash in January 2023.

• At its lowest, the Adani Group had lost over $100 billion in market value following the report.

Adani Group Stocks Rally After SEBI Clean Chit

Shares of Adani Group companies witnessed a sharp rally on September 19, climbing as much as 10 percent in intraday trading. The surge came after the Securities and Exchange Board of India (SEBI) formally cleared the conglomerate and its founder, Gautam Adani, of stock manipulation charges that US-based short seller Hindenburg Research had leveled in early 2023.

Among the group entities, Adani Enterprises, Adani Power, Adani Green Energy, and Adani Total Gas recorded significant gains. The positive movement in the stock prices was directly linked to investor confidence being restored after SEBI’s latest regulatory orders.

SEBI’s Findings in Detailed Orders

SEBI released two detailed orders summarising its investigation into the allegations raised by Hindenburg Research. The market regulator concluded that there was no evidence to suggest that Adani Group had routed funds through related parties in order to artificially inflate the share prices of its listed companies.

The investigation also examined charges of insider trading, market manipulation, and violations of public shareholding norms. After months of scrutiny, SEBI declared these allegations unsubstantiated. The findings removed the regulatory cloud that had been hanging over the group for more than a year.

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Allegations Made by Hindenburg Research

Hindenburg Research, a short-selling firm based in the United States, had released a report in January 2023 making wide-ranging accusations against the Adani Group. According to the report, the conglomerate allegedly used three firms—Adicorp Enterprises Pvt Ltd, Milestone Tradelinks Pvt Ltd, and Rehvar Infrastructure Pvt Ltd—as conduits to channel funds into Adani Enterprises and Adani Power.

The report claimed that these financial arrangements inflated the value of the group’s listed entities, misled investors, and violated regulatory norms. The publication of the allegations triggered a massive sell-off in Adani Group stocks, wiping out significant shareholder wealth.

Market Impact of Hindenburg’s Report

Following the release of the Hindenburg Research report, Adani Group companies faced intense scrutiny both domestically and internationally. The immediate impact was visible on the stock exchanges, where the group’s market capitalisation eroded dramatically. At its lowest point, the Adani conglomerate had lost more than $100 billion in market value.

The steep decline in valuations raised concerns among investors, analysts, and regulators. Questions about corporate governance, transparency, and financial dealings became the central focus of debates surrounding the group. However, SEBI’s latest orders have now dismissed the allegations as lacking substantive evidence.

SEBI’s Ruling Brings Relief to Investors

The latest clean chit from SEBI has brought significant relief to investors who had been uncertain about the regulatory overhang on the Adani Group. With the investigation closing in the group’s favour, the surge in stock prices indicates renewed confidence among market participants.

Investors interpreted the orders as an official endorsement of the group’s compliance with regulatory frameworks. The sharp recovery in share prices also highlighted the market’s immediate response to regulatory clarity.

Impact on Adani Group’s Image

For Gautam Adani and his conglomerate, SEBI’s ruling marks a crucial turning point. The allegations of stock manipulation had posed challenges to the group’s global reputation, particularly after the market rout triggered by Hindenburg’s report.

With the regulator stating that there is no evidence of wrongdoing, the group has gained a major boost in credibility. This development not only stabilises the investor sentiment but also allows the group to focus on its ongoing expansion plans without the overhang of regulatory doubts.

Hindenburg’s Exit from Operations

An important footnote to the saga is the closure of Hindenburg Research itself. The firm, which had published the damaging report in January 2023, has since shut down its operations. Despite the widespread attention its report garnered, SEBI’s findings ultimately contradicted its core claims.

The combination of Hindenburg’s exit and SEBI’s regulatory clean chit has shifted the narrative in favour of the Adani Group, strengthening its market standing once again.

Investor Outlook

The rebound in Adani stocks demonstrates how regulatory clarity can dramatically influence investor behaviour. In the months following Hindenburg’s report, sentiment had been dominated by fear and uncertainty, resulting in heavy losses. With SEBI’s final verdict, optimism has returned.

Analysts and traders observed heightened buying activity in Adani Enterprises, Adani Power, Adani Green Energy, and Adani Total Gas immediately after the regulator’s announcement. The gains of up to 10 per cent in a single session reflected the pent-up demand from investors awaiting closure on the regulatory front.

Conclusion

The developments on September 19 mark a major chapter in the Adani Group’s journey since the crisis triggered by Hindenburg Research in January 2023. The SEBI clean chit, delivered through two detailed orders, clarified that there was no evidence of related-party fund flows, insider trading, or manipulation of public shareholding norms.

The sharp rally in Adani Group stocks following the orders reflects restored investor confidence and underscores the significance of regulatory clarity in shaping market outcomes. While the conglomerate had lost more than $100 billion in market value at its lowest point post the Hindenburg allegations, the latest ruling has brought much-needed relief to shareholders.

For Gautam Adani and his group companies, the SEBI verdict not only strengthens their market standing but also closes a chapter of uncertainty that had overshadowed the business for more than a year.

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