Adani Enterprises shares jump 20%

On January 24, entrepreneur Gautam Adani’s firm lost roughly $120 billion in value after charges of accounting fraud were levelled by short-seller US investment organisation Hindenburg Research.

Shares in the flagship company of embattled Indian conglomerate Adani surged up to 20% on Tuesday, recouping some of the massive drop sustained since last month.

On January 24, entrepreneur Gautam Adani’s company lost roughly $120 billion in value after Hindenburg Research, a short-seller in the United States, accused it of accounting fraud.

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The fall has prompted questions about the group’s capacity to generate new funds to pay off its obligations. It cancelled a share offering and, according to reports, a bond issuance last week.

However, Adani announced on Monday that it was returning $1.1 billion in early loans in order to reassure investors.

Adani Enterprises, the group’s flagship company, jumped 20 percent on Tuesday, with trading stopping three times.

They lost some of their gains once trading resumed, but they were still up nearly 15% in the late morning session.

Adani Transmission and Adani Wilmar both increased their limits by 5%, while Adani Total Gas decreased their limits by the same amount.

Hindenburg accused Adani of “brazen stock manipulation and accounting fraud” in “the largest con in corporate history.”

According to the documents, Adani fraudulently raised the share prices of its units by funnelling money into the stocks through offshore tax havens.

Adani profited from what it described as a “decades-long pattern” of official forbearance and the fact that “investors, media, people, and even politicians have been unwilling to speak out for fear of retaliation.”

The charges have been dismissed by the corporation as a “maliciously mischievous” reputational hit.

Baseless Allegations

The loan repayment notice came as The Economic Times reported that Standard Chartered in the United Kingdom has joined Swiss banking behemoth Credit Suisse and Citigroup in the United States in refusing to accept Adani bonds as collateral for loans advanced to private banking clients.

Last week, Gautam Adani, 60, insisted that the “fundamentals of our company are very strong, our balance sheet is healthy, and our assets are robust.”

“These allegations are baseless,” he told India Today television on Friday.

His personal fortune has more than halved, dropping from third to 17th on Forbes’ real-time list of the world’s richest persons on Tuesday, with a fortune of $63 billion, down from $127 billion.

Adani halted a $2.5 billion stock offering last week in order to lower debt levels, rebuild trust, and diversify its shareholder base.