Retail Investors Who Bought Adani Shares Amidst Hindenburg Row Made Money: Report

Shares of Adani Group companies saw a sudden interest from India's retail investors in the wake of US Shortseller Hindenburg Research's scathing report published on January 24 last year. Now, after almost a year has passed, the faith of these retail investors is still intact in Adani group firms, according to a Bloomberg report.

As per the report, individual holdings in nine of the 10 Adani group stocks at the end of December were higher than they were before the short-sellers attack on the Indian conglomerate.

The group's market value increased by over $60 billion since late November and is just $50 billion away from erasing the losses triggered by Hindenburg's report. The recovery likely rewarded retail investors who used the selloff as a buying opportunity.

"Many of the retail investors came in after the crash," said Chakri Lokapriya, managing director at Mumbai-based asset manager RedStrawBerry LLP and former fund manager at BNP Paribas Asset Management. "They have exhibited a sense of maturity to hold on given that infrastructure companies take longer to realize their earnings potential."

While foreign investors, insurance companies, and high-networth individuals pared their holdings in various group entities in 2023, the number of retail investors - those with at least Rs 2,00,000 ($2,411) to invest - jumped 42% to 6.7 million in Adani companies, data compiled by Bloomberg show.

Though the Gautam Adani-led Indian conglomerate repeatedly denied Hindenburg's allegations of stock price manipulation and fraud, the controversy wiped off more than $150 billion from its market value at one point. Billions of dollars in investments from marquee funds including Rajiv Jani's GQG Partners LLC, and more recently, and recent Supreme Court observation in Adani-Hindenburg row wherein the top court said that it won't take media reports on Adani as the "gospel truth," has reinstilled investor confidence in the group stocks.

To be sure, retail shareholding in the flagship Adani Enterprises Ltd. and Adani Ports and Special Economic Zone (APSEZ) fell from the levels reached at the end of March 2023, as the rally likely prompted some investors to book gains.
"Retail investors who bought into these stocks definitely made money," said Ambareesh Baliga, an independent market expert. "But when you are buying momentum stocks, you should book profits from time to time."

Here's a look at the last six months and the YTD performance of different Adani group stocks:

Adani Enterprises - YTD performance is up 1.99%, the stock has gained 23.53% in the last six months

Adani Power- YTD performance is down 0.40%, the stock has gained 112.90% in the last six months

Adani Ports- YTD performance is up 12.21%, the stock has gained 60.83% in last six months

Adani Total Gas - YTD performance is up 0.37%, the stock has gained 55.28% in last six months

Adani Green Energy- YTD performance is up 1.73%, the stock has gained 68.64% in last six months

Adani Energy Solutions Ltd- YTD performance is up 3.08%, the stock has gained 41.13% in last six months.