Adani Rescinds Share Sale As Stock Tanks Amid Hindenburg Report Fallout

Gautam Adani seated at a function.

Getty / Dipam Bhachech

Just a day after closing a $2.5 billion share offering, Gautam Adani, has withdrawn in the face of blowback from a U.S. short-seller's report.

Shares of Adani’s flagship company, Adani Enterprises (ADANIENT.NS), couldn’t sustain a modest reprieve after the offering closed, plunging almost 27% in trade today. Adani cited market volatility as the reason.

“[T]oday 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,” Adani said in a statement.

The company said it will issue refunds to investors.

Adani Enterprises has been the subject of a report by U.S.-based Hindenburg Research alleging accounting fraud and stock price manipulation. However, Adani's lengthy rebuttal wasn't able to stave off a decline in stock prices in the aftermath of the report, eroding some of Adani’s fortune.

While the share sale for Adani Enterprises wasn’t a resounding success, it still managed to shore up interest from foreign institutional investors, such as the Abu Dhabi royal family and high-net-worth Indian investors.

But Adani stock's woes may be far from over. India’s stock market regulator may be looking into irregularities during the share offering, Reuters reported citing sources.

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  1. BSE India. "Adani Enterprises Limited Stands by Its Investors."

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