MUMBAI, Feb 1 (Reuters) – India’s markets regulator is looking into the recent plunge in shares of Adani Group and investigating any possible irregularities in the sale of shares by its flagship company, a source familiar with the matter told Reuters on Wednesday.
The Securities and Exchange Board of India (SEBI) review comes on a day when shares of Adani Group tumbled and losses at seven listed companies rose to $86 billion following a US short-selling report.
Adani Group and SEBI spokespeople did not immediately respond to requests for comment.
SEBI is fully investigating the stock crash, the source said, declining to be identified as the matter is confidential.
The fall in shares was triggered by a report by the Hindenburg Research Institute last week that alleged misuse of offshore tax havens and stock manipulation by the Adani Group. It also raised concerns about the high debt and valuation of Adani’s seven listed companies.
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The group has denied the allegations, saying the short-seller’s narrative of stock manipulation has “no basis” and stems from ignorance of Indian laws. This organization has always made the necessary regulatory disclosure.
The source told Reuters that India’s market regulator is also looking into any possible manipulation of Adani Group’s share price, as well as possible irregularities in the $2.5 billion sale of flagship Adani Enterprises ( ADEL.NS ) that concluded on Tuesday. Receipt.
While the IPO book-building process was only 3% covered on Monday, it was fully subscribed on Tuesday. With an influx of foreign institutional investors and corporate funds, the group managed to secure its investments even though Adani’s companies were trading below the offer price.
Adani Enterprises ( ADEL.NS ) fell 28 percent on Wednesday, a day after the stock sale closed, taking its losses since the Hindenburg report to more than $18 billion. Adani Ports and Special Economic Zone ( APSE.NS ) fell 19 percent. Both stocks recorded their worst day ever.
A second source familiar with the matter said: “All the key departments – corporate assets, the watchdog department at the regulator are looking into the share price decline. Exchanges are also sending a report.”
The first source added that SEBI is also looking into allegations of transactions between Adani Group and related entities mentioned in the Hindenburg report.
“All transactions entered into by us with persons who qualify as ‘related parties’ under Indian accounting laws and standards have been properly disclosed by us,” Adani said in a rebuttal to the Hindenburg report.
Reporting by Jayshree P. Upadhyay Editing by Ira Dugal and Mark Potter
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