The Adani group is currently facing a significant setback as reports surface of US regulatory authorities launching inquiries into statements made by Adani group executives. The repercussions have been severe, with over ₹50,000 crores wiped off the market capitalization of Adani Group companies. The plummeting market cap has dipped below ₹10 lakh crore, resulting in a great decrease of over ₹80,000 crore in just a week. Consequently, the share prices of Adani group companies experienced a decline of 1.5-6.8 percent on the NSE.
US Regulatory Inquiries Impact Adani Group Stocks
The downfall of Adani group stocks can be attributed to the recent scrutiny by US regulators, who have been contacting investors regarding statements made by Adani group executives during their presentations. This has raised concerns among investors and triggered a sell-off, leading to a substantial decline in market capitalization.
Adani Group's Strong Corporate Governance Stance
An Adani Group spokesperson reaffirmed the company's commitment to robust corporate governance practices in response to the allegations and market turbulence. The spokesperson rejected any insinuations that the group's businesses operate contrary to the regulations of the jurisdictions they are based in.
The spokesperson stated, "We have not been made aware of any subpoenas issued to investors. Our various issuer groups maintain full confidence that the disclosures in the relevant issuer offering circulars are comprehensive and accurate." These statements aim to address the reports of US regulatory authorities seeking information from investors regarding the statements made by Adani group executives.
US Regulatory Authorities Investigating Adani's Presentations
According to a Bloomberg report, the US (SEC) Securities & Exchange Commission and the US Attorney's Office in Brooklyn, New York, are investigating the Adani group's presentations to American investors. The inquiries stem from Hindenburg Research's report released in January, which prompted the authorities' interest in understanding what Adani Group's executives communicated during their interactions with investors.
The Adani Group spokesperson emphasized its commitment to strong corporate governance and compliance with all laws and regulations across their various markets. They firmly repudiated any suggestions that the Adani Group and its businesses have acted contrary to the regulations and accounting standards of the jurisdictions in which they operate.
Roadshows and Institutional Placements to Rebuild Confidence
The top management of the Adani Group conducted many roadshows in the US, Hong Kong, Singapore, and India to address Hindenburg's accusations of round-tripping and bad corporate governance.
During these roadshows, they refuted the allegations and showcased the robustness of their operations. Additionally, the group seeks to raise ₹21,000 crores through institutional placements and has been engaging with investors.
Market Fallout: Declining Share Prices
The decline in Adani group stocks was evident on the market, with Adani Ports and Adani Enterprises closing 4.2 percent and 6.8 percent lower, respectively, on the NSE. Adani Transmission and Adani Power also experienced significant declines of over 5.5 percent each.
SEBI Investigation and Supreme Court's Report Awaited
News Came From India Said the Securities and Exchange Board of India (SEBI) is investigating the Adani group, with the final report set to be submitted on August 14. Earlier, a Supreme Court-appointed panel stated in May that it could not conclusively determine any price manipulation in the Adani group