After the release of Hindenburg reports, the shares of Adani Group companies are touching new low every day. To add more problems for the Group, a credit rating company, Credit Suisse has reportedly assigned zero value to the bonds issued by Adani Group’s subsidiaries. Following this the sahres of Adani crashed fruther.
Adani Group has on its part refuted all the allegation leveled against it by the Hindenburg report and given a point by point reponse to the questions raised in the report.
The financial research firm, Hindenburg focusses on short selling. It also attempts to report corporate fraud and corruption. The firm has history of targetting big companies. Since the release of its recent report on Adani, the shares of Adani Group companies have seen over 30% fall.
How Important is Adani Groups?
Many in India consider the Adani Group too big to fail. The main reason for this can be the presence of Adani Group in almost every sector, from energy to ports to consumer market. Adani has everything under his name and it also gets support from the government.
The Government of India is also investing heavily in ports, infrastructure and it needs private players like Adani, Ambani and Tata Groups to execute its projects. Adani Group companies also provide employment to the thousands of people in India.
Adani Group also serves the streategic intersts of Indian government in various countries such as Sril Lanka, Bagladesh. Recently, the Group has also acquired strategic Haifa Port In Israel for $1.2 Billion.
Thus, there is no doubt Adani Group companies are important and playing crucial role in the economy. But, the current sellout and panic driven by a report and subsequent actions by credit ratings agency is damanging the reputation of the Group and affect it seriously.
Is it a buying opportunty in Adani Group share?
Refuting the allegations raised by the Hindernbirg report, Adani called the report an attack on India. As per the media reports, the Group is also planning to take legal action against the financial firm.
If Adani manages to prove the report an attack as he claimed, the Hindenburg can be subjected to legal action and a perception of revival will be enough to drive up the shares of Adani Group companies.
When it comes to taking an inverstment decision on Adani Group shares, most of the experts have recommended the retail investors to wait and watch. They can enter from the low when the shares show some signs of recovery. The Adani Group has great opportunities in India as a lot of infrastructure, energy projects have been announced by the government in its budget. If the Group manages to deal with the report of a short seller, it can re-emerge and dominate the market.
Disclaimer:
This article is solely for informational purposes. It is not a stock recommendation and should not be construed as one.
