TWICE BORN AT THE BOURSES

While the first few months of 2023 saw nothing going right for the Adani Group, market watchers do not see much going wrong for the 35-yearold group as it enters the New Year

- Ayaan Kartik & Parth Singh

With the Hindenburg report against the Adani Group set to turn one year old, the shares of the group may find themselves at the same level they were at before the massive sell-off. While Adani businesses have recovered to an extent from the hit to valuations, the battle for trust is not over yet. Does this explain why the feelings of institutional investors on the bourses do not match the exuberance of retail investors?

The timing of launching the country’s largest follow-on public offer (FPO) by the Adani Group in January  2023 could not have been better. The shares of the conglomerate’s flagship firm, Adani Enterprises, had just ended 2022 with over 120% returns. Speaking ahead of the launch of the FPO, chairperson Gautam Adani expressed confidence about the timing of the issue. “A time when we are at our strongest with most of our growth is still ahead of us...,” he asserted.

Just a day after the speech, calamity hit the group. New York-based short seller Hindenburg Research’s scathing report sparked a storm with allegations of market manipulation. Within days, billions of dollars were wiped off the conglomerate’s shares as investors rushed to exit. From ₹3,436 on January 23, the stock of the group’s flagship firm crashed to ₹1,586 in just 10 days.

The crisis forced the company to cancel its FPO and focus on damage control. Gautam Adani, who had reached the top of richest Indians’ list, found himself out of the top 25 within a matter of days. In the 35-year-old history of the group, this was the toughest challenge it had faced, which threatened to unravel an empire spread across the country.