The troubles for the Adani conglomerate continue to mount, with Adani Energy Solutions, a key player in the group’s portfolio, receiving a show-cause notice from the Securities and Exchange Board of India (SEBI). The notice, issued this week, accuses the company of incorrectly categorizing certain investors as public shareholders, violating SEBI’s minimum shareholding regulations. This development comes as the latest blow to the Adani Group, which is already grappling with the fallout of the damning allegations levied by US-based short-seller Hindenburg Research earlier this year.
SEBI’s show-cause notice echoes some of the serious accusations made by Hindenburg, raising further questions about the group’s corporate practices. While the Adani Group has consistently denied the allegations, the ongoing scrutiny by the market watchdog highlights the gravity of the situation.
Adani Energy Solutions, a power transmission company, has confirmed receipt of the show-cause notice and acknowledged its connection to SEBI’s minimum public shareholding norms. This revelation has sent shockwaves through the market, particularly as SEBI Chair Madhabi Puri Buch herself has recently refuted serious allegations made against her by Hindenburg.
The news has had a significant impact on Adani Energy Solutions’ share price, which has fallen for the fifth consecutive day. On Friday, the company’s shares closed at Rs 920.2 apiece on BSE, marking a 5.7% decline and bringing the total weekly loss to 11.9%. This sustained drop, which has resulted in a Rs 14,974 crore loss for investors over just five days, underscores the investor sentiment surrounding the Adani Group. It’s worth noting that this downturn comes despite Adani Energy Solutions reporting a 172% increase in net profit to Rs 773 crore for the July-September period.
The market capitalization of Adani Energy Solutions has also taken a significant hit, dropping by Rs 14,974 crore to Rs 1,10,536 crore as of October 25th. This decline underscores the market’s reaction to the recent developments and the ongoing concerns about the Adani Group’s future.
As the Adani Group navigates this turbulent period, the focus remains on the SEBI investigation and the implications for the group’s various businesses. With investors bearing the brunt of this bad news, the coming weeks will be crucial for gauging the long-term impact of the Hindenburg allegations and the regulatory scrutiny they have sparked.