NEW DELHI: Billionaire Gautam Adani on Thursday welcomed the Apex Court order to formulate a Panel to probe the stock price crash in Adani stocks following explosive claims made in the Hindenburg report.
"The Adani Group welcomes the order of the honourable Supreme Court. It will bring finality in a time-bound manner and Truth will prevail," Gautham tweeted.
The Supreme Court ordered the formation of a six-member committee on Thursday to look into various regulatory aspects for stock markets following the filing of four PILs in the Supreme Court regarding the Hindenburg report and the subsequent crash in the stock prices of Adani Group companies. The committee will be led by a former Supreme Court judge named AM Sapre.
Former judges AM Sapre, KV Kamath, Nandan Nilekani, Somasekharan Sundaran, OP Bhat, and JP Devdatt will be on the expert panel. The panel must deliver its findings within two months, and the Bench further ordered the Center, financial regulatory organisations, and the SEBI chairperson to cooperate fully with the panel.
All ten Adani stocks were trading in the green today, with four of them locked in 5% higher circuits, following the announcement of the court's judgement. Adani Enterprises, the main company in the conglomerate, increased by 2%. Adani stock has been losing money ever since the short seller's report was made public on January 25. The loss has now reached a total of Rs 12 lakh crore.
Block deals were also observed in 4 Adani Group firms, including Adani Enterprises, in the meantime. While the Hindenburg study referred to Adani's accomplishment as "the largest scam in corporate history," valuation expert Aswath Damodaran claimed that over-leveraging was simply a bad business practise.
Damodaran has stated, "In my opinion, Adani Enterprises bears too much debt, with an actual debt of 413,443 million more than double its optimal debt of 185,309 million. Reducing its debt load will not only lessen its chance of failure, but will also lower its cost of capital. The Adani group companies overreacted, according to Abhishek Agarwal, Managing Partner of Rockstud Capital, to the Hindenburg report.
"Success for Adani did not come quickly. The methods of financing the expansion of the company include debt leverage or the diluting of equity. There is no default history, no corporate governance red flag from SEBI or other similar regulatory bodies, and no solid supporting data for several of the report's assertions. Clearly, the news has significantly harmed their stock and bonds' value and image. To avoid having their share pledge revoked, they are compelled to make loan repayments early "He continued by saying that the current upheaval is only transitory and that there will undoubtedly be a rebound.
According to Hindenburg, Adani Group inflates stock prices and violates shareholding regulations, which call for the public to own at least 25% of listed businesses, by using a variety of shell companies. Additionally, it warned of debt-fueled growth and the group's "seriously overleveraged" state. The share prices of businesses within the Adani Group have dramatically decreased during the previous month. The conglomerate was accused of stock manipulation and fraud in the January 24 Hindenburg investigation.
Hindenburg report on Adani: Supreme Court orders Sebi probe
Adani-Hindenburg Row: SC to deliver decision on probe panel today
Adani Enterprises shares rise nearly 30-pc in 2 days, Here is why