Investors showed keen interest in Adani Group stocks following the Supreme Court's decision to hold off on delivering a verdict in the Adani-Hindenburg case. The Chief Justice of India, DY Chandrachud, leading the bench, noted that the Securities and Exchange Board of India (SEBI) should wrap up its investigation in all 24 cases. This sparked positive traction in Adani Group stocks.
Adani Group stocks rally
Every single stock from Gautam Adani’s business empire enjoyed gains on Tuesday, November 28, as the Supreme Court held off on delivering a verdict in the Adani-Hindenburg matter. This marked the conglomerate’s most successful day in the stock market since the impactful report by US-based short seller Hindenburg Research shook things up back in January.
Adani Enterprises Ltd (AEL), the leading force in the Adani Group, saw its shares surge by a solid 12%, reaching a peak of ₹2,512.40. It wasn’t just AEL enjoying the spotlight—other stars in the Adani Group constellation, like Adani Total Gas, Adani Power, and Adani Ports, experienced gains of 20%, 13%, and 6%, respectively. Meanwhile, Adani Energy Solutions and Adani Green Energy added 12% and 7%, NDTV rose by 5%, Adani Wilmar and ACC both climbed by 5%, and Ambuja Cements saw a 3% uptick. It was a pretty eventful day for the Adani line-up!
The Adani Group witnessed a whopping surge of over $15 billion in market value as its stocks rallied today. Abhay Agarwal, a fund manager at Piper Serica Advisors Pvt, noted that many money managers had shifted gears, abandoning short positions and opting for long positions. He acknowledged that while the Supreme Court’s statement regarding SEBI’s probe was definitive, today’s stock rally seemed more driven by a short squeeze.
In the ongoing Adani-Hindenburg case, the verdict has been put on hold by a bench led by Chief Justice of India DY Chandrachud. The apex court emphasized that SEBI needs to complete its probe in all 24 cases.
SEBI had submitted a crucial status report on its investigations into the allegations of stock price manipulation by the Adani Group to the Supreme Court on August 25. According to the report, SEBI had wrapped up its investigation in 22 out of the 24 cases.
What Supreme Court Bench Said
SEBI is tasked with completing investigations in all 24 cases. We shouldn’t treat the Hindenburg report as an absolute truth; its accuracy needs scrutiny, so we’ve asked SEBI to look into it. Making allegations carries a responsibility; this was highlighted when petitioners claimed that Somsekhar Sundaresan, now a judge in the Bombay High Court, was Adani Group’s counsel. The court clarified that following this logic would mean no lawyer could become a judge.
Our aim was to bring in industry veterans, not appoint judges, to lend their expertise to address the issue. It’s crucial not to jump the gun and demand SEBI to disclose findings before it can initiate legal proceedings. We can’t treat a story in the newspaper, even one in the Financial Times, as an absolute truth.
Petitioners To The Supreme Court
How is it that journalists manage to obtain documents detailing Vinod Adani’s controlling interest, while SEBI, armed with its extensive powers, can’t access them for years? There’s a call for the Supreme Court to consider appointing a Special Investigation Team (SIT).
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Reports from Financial Times and The Guardian suggest that certain funds were overseen by Vinod Adani. SEBI has stated that investigation reports are complete but has yet to disclose them. There’s a concern about conflicts within the expert committee, with two members potentially compromised; thus, there’s a suggestion to reconstitute the committee.
Notably, OP Bhatt, the chairman of GreenCo Energy, was involved with Adani as recently as March 2022 when GreenCo was partnering with Adani. Additionally, Somsekhar Sundaresham has served as counsel for the Adani Group.
Going back to 2014, the Directorate General for Revenue Intelligence (DRI) estimated over invoicing of equipment amounting to ₹6,700 crore. The DRI revealed that parts of the siphoned money were routed through Dubai and Mauritius back to Adani group companies. Strikingly, SEBI claims to be unaware of this DRI letter addressed to the SEBI Chairman.
Solicitor General To Supreme Court
In 2013, SEBI received information and subsequently reached out to the Directorate General for Revenue Intelligence (DRI), which concluded proceedings in 2017. Additionally, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had set aside the proceedings.
We approached the OCCRP, and while they responded, they declined to share documents, suggesting we obtain them from Prashant Bhushan. It’s noteworthy that Prashant Bhushan is compiling a report and presenting it before the Supreme Court, creating a potential conflict.
Adani Group stocks have been under close scrutiny since the explosive report by Hindenburg Research in January 2023. The report, accusing the Adani Group of manipulation and malpractices, had a significant impact, wiping out billions of dollars from the conglomerate’s market value at one point. Despite the allegations, the Adani Group has vehemently denied any wrongdoing.