New Delhi: A recent report about the irregularities in the foreign funding in Adani group companies failed to dent sentiments in two key Indian stock market indices – the 30-share BSE Sensex and more broad-based 50-share NSE NIFTY – as both ended the week on a positive note.
On Thursday, a report by a network of investigative journalists – known as the Organized Crime and Corruption Reporting Project (OCCRP) – claiming fresh insights into the foreign funding in the stocks of Adani Group companies was released. The report was also carried by two foreign publications – the Financial Times and the Guardian.
The OCCRP report alleged that two men who secretly invested in the massive conglomerate turned out to have close ties to its majority owners, the Adani family, raising questions about violations of Indian law.
The Adani Group led by Gautam Adani refuted all the allegations. The group termed the report as 'recycled allegations' carried out by a section of foreign media to revive the meritless Hindenburg report. As expected, the allegations impacted the Adani Group stocks as most of the Adani Group companies traded in negative on Thursday.
BSE Sensex
The combined market capitalization of 10 listed Adani group companies fell by Rs 35,624 crore to Rs 10,49,044.72 crore on Thursday (August 31) against their market capitalization of Rs 10,84,668.73 crore on the previous day (August 30). While shares of Adani Enterprises fell by 5.11 per cent on the BSE, shares of Adani Ports fell 2.92 per cent to Rs 795.10.
Shares of Adani Power were down by 4.45 per cent to Rs 313.80 and shares of Adani Energy Solutions fell by 3.53 per cent. Similarly, shares of Adani Green tanked by 4.37 per cent to Rs 928.25 while shares of Adani Wilmar, Adani Total Gas, ACC and NDTV were down by up to 3.2% at the close of the trading session on Thursday.
As a result, the BSE Sensex was down by 256 points at the time of closing on Thursday in comparison with its Wednesday closing.
However, on Friday, the BSE Sensex recovered more than the lost ground and it closed by rising by 555 points (0.86 per cent) as it closed at 65,387. While Ultratech Cement was down by half a percent at the time of closing and only three other companies Larsen & Toubro, Sun Pharma and Nestle India closed the trading in negative.
NSE NIFTY
Similarly, the OCCRP report against Adani Group failed to dent sentiment in the 50-share NSE Nifty as the index closed Friday in positive. NSE NIFTY closed in positive on Friday and it was up by nearly 1 percent at 19,435. And there were only 7 stocks in the 50 share index that ended the day in negative. These are Hindustan Unilever, Sun Pharma, Dr Reddy’s, Nestle India, Cipla, HDFC Life and Ultratech Cement.
In the immediate wake of the OCCRP report, the BSE Sensex was down by 253 points or nearly 0.4 per cent at the time of closing on Thursday and NSE Nifty was down by 93 points or 0.48 per cent. However, on Friday both the BSE Sensex and NSE Nifty not only recovered the ground lost on Thursday but also gained nearly 1 per cent each at the time of close of the trading session.
SEBI probe in contravention of stock market laws
Earlier this week, India's stock market regulator, the Security and Exchange Board of India (SEBI) informed the country's top court that it was awaiting information from foreign agencies to complete its probe into the allegations levelled by the New York-based short-seller Hindenburg Research into the functioning of Adani Group. As a result, the Supreme Court postponed the hearing on the status reports submitted by the SEBI.
In March this year, the Supreme Court formed a six-member panel to probe if there was a regulatory failure in dealing with alleged contravention of India's security market laws by the Adani Group or other companies.
