Adani Enterprises and other group stocks zoom up to 13% as Sebi clears Gautam Adani, Rajesh Adani of Hindenburg allegations

Adani Group shares soared up to 13.3% on Friday, September 19, after the Securities and Exchange Board of India (Sebi) gave a clean chit to Gautam Adani, his brother Rajesh Adani, and some Adani Group companies in the allegations made by US short-seller Hindenburg Research.

Shares of Adani Total Gas witnessed the highest surge, rallying 13% to their day’s high of Rs 687.35 on the BSE, followed by the shares of Adani Power, which surged 9% to Rs 686.95.

Meanwhile, shares of Adani Enterprises and Adani Green Energy rose by nearly 5% to Rs 2,519.55 and Rs 1,032.30, respectively. Shares of Adani Ports surged by 2.8% and AWL Agri Business shares rallied 3%.

The regulator said there was no proof of wrongdoing in the case related to the allegations made by the US short-seller in January 2023.

Hindenburg had accused the Adani Group of stock manipulation and accounting fraud, which had caused a sharp fall in the shares of the group’s listed companies. Sebi said its investigation did not find any fraud, misuse of money, or false records.

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In its final orders, the market regulator looked into claims that the Adani Group promoters used companies like Adicorp Enterprises, Milestone Tradelinks, and Rehvar Infrastructure to move money around within the group. These funds were said to be routed to listed companies like Adani Power and Adani Enterprises. However, Sebi said these were regular loan transactions, and all the money was returned with interest before the investigation even began.

Adani Ports and Special Economic Zone (APSEZ) had extended loans to these firms, which routed the funds to Adani Power and Adani Enterprises. Both companies later repaid the loans with interest, and the intermediaries returned the money to APSEZ with interest as well.

Sebi observed that 67% of Adicorp Enterprises’ transactions were with Adani Group companies, and several loan agreements were signed swiftly, sometimes on the same day. One of Adicorp’s directors, Aadarsh Shah, has been closely associated with the Adani family for over 30 years.

However, Sebi concluded that these transactions did not violate any rules and were not classified as related-party transactions under the regulations applicable at that time.

Earlier in January 2024, the market regulator had issued notices to Gautam and Rajesh Adani, saying they had approved questionable financial deals and possibly tried to hide related-party transactions from 2013 to 2021. However, after completing its probe, Sebi ruled that there was no fraud or hiding of information, and all the money had been properly returned.

Sebi’s whole-time member Kamlesh Varshney said that the transactions in question did not go against the listing rules or the regulator's disclosure guidelines, known as LODR. According to him, the rules at that time did not treat such dealings as related-party transactions, since the companies involved were not officially connected.

Also read: Rs 46,000 crore rally! What Sebi slamming the door on Hindenburg means for Adani investors

Reacting to the Sebi order, Gautam Adani wrote on X (formerly Twitter), “After an exhaustive investigation, Sebi has reaffirmed what we have always maintained, that the Hindenburg claims were baseless. Transparency and integrity have always defined the Adani Group. We deeply feel the pain of the investors who lost money because of this fraudulent and motivated report.”

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