Adani’s stocks soars after SC clears the ‘Hindenburg’

SC rejects interference in SEBI's Adani-Hindenburg probe, denies transfer to special investigation team

On Wednesday, the Supreme Court declined to initiate investigations by a special investigation team (SIT) or the Central Bureau of Investigation (CBI) into the Adani Group. This decision comes as a significant relief for the business conglomerate, following allegations of fraud, misgovernance, and stock price manipulation by US short-seller Hindenburg Research.

A panel of three judges declared that there is no basis for questioning the investigation conducted by the Securities and Exchange Board of India (SEBI). The bench did not find justification in authorising another agency to examine the issue. Additionally, the court granted a three-month extension to the regulator to conclude its ongoing investigation into the accusations made by US short seller Hindenburg Research against the group last year.

Gautam Adani yesterday posted on X, “Truth has prevailed. Satyameva Jayate. I am grateful to those who stood by us. Our humble contribution to India’s growth story will continue.”

The surge in the stock prices of the group’s publicly traded firms continued, resulting in the overall market value of the group more than doubling to ₹15.1 trillion. This remarkable increase comes after a significant dip to ₹6.81 trillion in the weeks following the Hindenburg report almost a year ago. However, the bonds listed overseas experienced a slight decrease in trading.

The court stated that, “The reliance on unsubstantiated news reports and third-party organisations cannot be accepted to doubt the probe by a statutory regulator.”

The objections raised by petitioners regarding the potential conflict of interest among Expert Committee members were dismissed. Nevertheless, the ruling emphasised the importance of the government and SEBI considering the committee’s recommendations to enhance the well-being of Indian investors.

Despite the initial market downturn signalled by Sensex and Nifty at the opening bell, the share prices of various companies within the Adani Group surged by a total of 18% in early trade hours on Wednesday. This positive trend followed the Supreme Court’s dismissal of the report submitted by Hindenburg on the Adani Group.