Investors take a positive cue from the court’s direction to SEBI to conclude its investigation and the observations by the chief justice of India that Hindenburg’s report could not be considered as “credible”
Shares of billionaire Gautam Adani’s 10 listed companies surged on Tuesday, the first trading day following a long weekend, after the country’s Supreme Court reserved its judgement on the long-running Adani-Hindenburg saga last week. The court concluded hearings on multiple petitions about the Securities and Exchange Board of India (SEBI)’s investigation into the allegations of stock manipulation that were made against Adani by U.S.-based Hindenburg Research ten months ago.
The Supreme Court Bench said that SEBI must complete the probe in all 24 cases. “We don’t have to treat the Hindenburg report as being a statement of truth. There is no means of testing the veracity of the Hindenburg report and hence asked SEBI to probe,” the bench said. “There has to be some responsibility in making allegations.” This was in regards to petitioners telling the court that Somsekhar Sundaresan, recently elevated as additional judge of the Bombay High Court, was counsel for the Adani Group. The court further said that by this logic, no lawyer can become a judge. “We didn’t appoint judges but industry veterans to bring expertise in addressing the issue.”
The apex court concluded hearings on these petitions on Friday, November 24, but the stock reaction was witnessed starting Tuesday, November 28, as markets were closed on Monday (November 27) on account of Guru Nanak Jayanti.
Sebi on Friday had informed the Supreme Court that it does not need additional time to complete its investigation into the Adani Group, with 22 of the 24 cases related to the Hindenburg matter already resolved. The probe’s remaining aspects hinge on data from foreign regulatory bodies.
The apex court’s three-judge panel was led by Chief Justice D Chandrachud.
Investors took a positive cue from the court’s direction to SEBI to conclude its investigation and the observations by the chief justice of India that Hindenburg’s report could not be considered as “credible” and nor should media reports be treated as “gospel truth.” SEBI on its part assured the court that it did not need an extension and had completed its investigation of 22 out of 24 cases.
After witnessing the biggest market cap rise since Hindenburg in the previous session (November 28), the Adani Group stocks continued their upward momentum on November 29 deals as well.
The rise comes after the Supreme Court reserved its order on multiple public interest litigation pleadings for an investigation into the allegations of manipulations and corporate malfeasance in the Hindenburg report. On 24th January, US-based Hindenburg Research published a report accusing the Adani Group of engaging in fraudulent activities to artificially inflate its stock prices. The Group has strenuously denied these allegations with a detailed rebuttal.
Among the stocks, Adani Total Gas witnessed the biggest surge in intra-day deals today, rising 18 percent to ₹760. The stock ended at its 20 percent upper circuit in the previous session. Just in 2 sessions, it has advanced over 41 percent. It was followed by Adani Energy Solutions, which jumped 10 percent to its intra-day high of ₹954.85. It also rallied 18.65 percent in the previous session.
Meanwhile, Adani Wilmar gained almost 7 percent to ₹372, Adani Green Energy added as much as 6.6 percent to ₹1,122.90, Adani Power advanced 5.6 percent to ₹470.90 whereas Adani Ports and Adani Enterprises were up 2 percent each in intra-day deals today. These 5 stocks also rose between 5 percent and 12.5 percent in the previous session.
“The mood among money managers has been to cut all shorts and go long, so I am not at all surprised by today’s move,” said Abhay Agarwal, fund manager at Piper Serica Advisors Pvt. The SC’s statement about SEBI’s probe was definitive but the stock rally today “seems more about short squeezing”.