WHY IT'S HOLDING STEADY

THOUGH VOLATILE, INDIAN BOURSES HAVEN’T TAKEN THE BEATING ONE ANTICIPATED IN THE WAKE OF HINDENBURG’S ADANI REVELATIONS. WHAT EXPLAINS THEIR RESILIENCE?

- M.G. Arun

On January 24, US-based shortseller Hindenburg Research set off a minor earthquake when it published a scathing report on one of India's largest business groups, helmed by a businessman steadily climbing the world's richest lists, the Ahmedabad-based Gautam Adani. Among its many accusations were manipulation of group companies stocks via shell firms in tax havens and accounting lapses. Coming shortly before Adani Enterprises' planned launch of a follow-on public offer, the revelations triggered panic selling of the shares of the nine listed group companies, sending their prices crashing on the Indian bourses. It not only eroded as much as $120 billion (nearly Rs 10 lakh crore) in investor wealth but also half the market capitalisation of the companies in a matter of just a week. Although robust quarterly results of group firms and pre-payment of over $1 billion (nearly Rs 8,280 crore) to release pledged shares in three group firms-Adani Ports & Special Economic Zone (APSEZ), Adani Green Energy and Adani Transmissionhelped the group arrest the overall slide, the share prices of some of the companies continued to go downhill.