Hindenburg's Valuation Siren Coming True? Adani Total First In Adani Shares To Dip 85% Since Bombshell Report

Among many allegations, US-based Hindenburg had also boldly stated that seven listed companies of the Adani Group were 85% overvalued. The short seller's warning seems to be coming true as Adani Total Gas becomes the first of Adani shares to nosedive by 85% since the nerve-wracking controversial report that rocked the financial market between early January to mid-March. Not just that, Adani shares have been broadly witnessing intense selling pressure for the past seven days.

Let's see how far Adani shares have performed since Hindenburg's report on January 24, 2023.

Of the total 7 listed companies of Adani Group, 5 of them have been in red for the past two seven consecutive days, while two of them have even touched a new 52-week low on October 23rd including Adani Total Gas.

Adani Total Gas:

The talk of the town is currently Adani Total Gas who slipped to touch a 52-week low of Rs 571 apiece on Monday. The stock ended at Rs 573.35 apiece, down by 2.97% on BSE after market hours. From this current price level, Adani Total Gas shares are now lower by 85% from the January 24th level where the stock price was at Rs 3,885.45 apiece.

This makes Adani Total Gas the first among its siblings to validate Hindenburg's report.

Adani Total Gas has been in red for fourth-consecutive trading sessions now.

Adani Enterprises:

The flagship company, Adani Enterprises ended at Rs 2,309.25 apiece, lower by 3.51% on Monday with a market cap of over Rs 2.63 lakh crore. Adani's largest holding in terms of valuation is Adani Enterprises which has been in red for past seven-consecutive days.

Since January 24th, Adani Enterprises' share price has contracted by nearly 33%. On the day, Hindenburg's report shocked India, Adani Enterprises' share price stood at Rs 3,442.75 apiece on BSE.

Adani Green Energy:

This energy stock ended in the red for the fourth-straight day to Rs 881.50 apiece on Monday, shedding by 4.20% on BSE. From this level, Adani Green shares have declined by 54% from Rs 1,913.55 apiece that was on January 24th.

Adani Wilmar:

Group's FMCG stock, Adani Wilmar is the second to touch a new 52-week high of Rs 320.25 apiece on Monday, and also record a fourth-consecutive losing streak.

The stock ended at Rs 324.20 apiece, down 3.41% on BSE. This stock has corrected by 43.45% from Rs 573.15 apiece level which was posted on January 24th.

Adani Energy Solutions:

Adani Energy Solutions, formerly known as Adani Transmission, is the second stock to come close to Hindenburg's 85% valuation siren. The energy stock ended at Rs 736.10 apiece, down by 3.63% on Monday. This would be a fall of 73.3% from the Rs 2,756.15 price level witnessed on January 24th.

Adani Power:

Just as the name goes, Adani Power has given powerpack performance, and is the first stock to record double-digit upside since Hindenburg's eye-boltching report.

Although the stock has been in the red for two days straight, Adani Power's share price ended at Rs 316.50 apiece, freefalling by a huge 6.4% on BSE.

But that has not stopped Adani Power from recording 14.3% upside since January 24th when the stock was at Rs 274.8 apiece earlier.

Adani Ports:

The Group's port stock has seen a steady performance so far, however, on Monday, this stock tumbled as well by 2.77% to end at Rs 771.10 apiece. Unlike its siblings, Adani Ports is the second share in the Group to have risen since January 24th level of Rs 760.85 apiece. Although, the upside is marginal by 1.35%.

Hindenburg's Overvaluation Warning:

In its bombshell report dated January 24th, Hindenburg argued that "even before examining the evidence put forward in this report and based solely on financials taken directly from its companies, the Adani Group appears to be highly overvalued."

As per Hindenburg, infrastructure firms are generally relatively sleepy, low growth, low multiple enterprises, yet valuation metrics of the Adani listed companies are comparable to the frothiest of high-growth tech companies.

"On a blended basis, compared to industry peers, we see 85%+ downside purely on fundamentals," Hindenburg had said.

Hindenburg had accused Gautam Adani-backed Grouop of brazen stock manipulation and accounting fraud schemes over decades. This matter is currently being heard and investigated by the Supreme Court and other authorities like market regulator Sebi, and Enforcement Directorate, others.

Adani has denied all the allegations by Hindenburg.

After deferring the hearing for the Adani-Hindenburg case twice recently, the Supreme Court is now expected to take the matter on October 20th, as per reports.