The group has denied the allegations, saying the short-seller's narrative of stock manipulation has "no basis" and stems from an ignorance of Indian law. It has always made the necessary regulatory disclosures, it added. The source told Reuters the Indian market regulator is also looking into any possible price manipulation of Adani group stocks, as well as examining possible irregularities in the $2.5 billion share sale of the flagship firm Adani Enterprises , which concluded on Tuesday. While the share offering's book building process was covered only 3% on Monday, it was fully subscribed on Tuesday. As foreign institutional investors and corporate funds flooded in, the group managed to secure investments even though Adani Enterprises traded below the share sale's offer price.
On Wednesday, a day after the share sale closed, Adani Enterprises plunged 28%, bringing its losses since the Hindenburg report to more than $18 billion. Adani Ports and Special Economic Zone dropped 19%. Both stocks marked their worst day ever.
In a statement withdrawing the issue Wednesday night, Adani said "the market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the company’s board felt that going ahead with the issue will not be morally correct."
The first source added that SEBI was also looking into allegations of dealings between Adani Group and related entities that were cited in the Hindenburg report. Adani said in its rebuttal to Hindenburg's report that: "All transactions entered into by us with entities who qualify as 'related parties' under Indian laws and accounting standards have been duly disclosed by us." "All key departments - corporate finance, surveillance department at the regulator are examining the share price fall. Exchanges are also sending a report," said a second source familiar with the matter. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ NEWSMAKER-India's Gautam Adani: Asia's richest man in the eye of a storm EXPLAINER-Adani vs Hindenburg: What you need to know EXPLAINER-Who is behind Hindenburg, the company that is shorting Adani? Hindenburg shorts India's Adani citing debt, accounting concerns; shares plunge India's Adani Group says evaluating action against Hindenburg Research FACTBOX-Adani slips in world's richest rankings India's Adani hits back at Hindenburg, insists made full disclosure Indian regulator looking into $86 bln Adani share wipeout As billionaire battles short-seller, 'IndiaStandsWithAdani' trends online GRAPHIC-Adani stock rout deepens Adani stock rout deepens GRAPHIC-Gautam Adani slips to world's eighth richest person GRAPHIC-Adani Group's ballooning debt GRAPHIC-Adani firms' two-day plunge after Hindenburg report ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Jayshree P. Upadhyay Editing by Ira Dugal, Aditya Kalra and Mark Potter)
