Adani Rescinds Share Sale As Stock Tanks Amid Hindenburg Report Fallout

By
Mrinalini Krishna
Mrinalini Krishna
Full Bio

Mrinalini Krishna is the Senior Editor of investing news at Investopedia. She's been a journalist for more than 10 years covering business, personal finance, and investing news.

Learn about our editorial policies
Updated February 01, 2023
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Just a day after closing a $2.5 billion share offering, Gautam Adani, has withdrawn in the face of blowback from a U.S. short-seller's report.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.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

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

Take the Next Step to Invest
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Service
Name
Description