Amidst growing financial pressure on the coal conglomerate, Adani Group responded to Hindenburg Research's fraud charges in a 413-page publication, comparing the US investment firm's findings to an attack on India.
The lengthy response was an effort by Adani to allay investor fears and fuel nationalist fervour as it works to finish one of India's largest-ever fundraising efforts, a US$2.5 billion share sale intended to fund capital spending and pay down debt.
However, the majority of Adani Group shares experienced a significant decline during Monday's trading session in India as response failed to appease investors, prolonging a market crash that has now cost the group's stock prices $65 billion in damages.
In Monday's trading, the shares of Adani Transmission, Adani Total Gas, Adani Green Energy, Adani Power, and Adani Wilmar all decreased by 5% to 20%.
Adani's statement (PDF) was released a few hours before the Indian markets opened again on Monday, following a near-US$50 billion decline in the conglomerate's businesses' combined worth due to irrational trading last week.
The Adani reaction stated, "This is not just an unwarranted attack on any particular company but also a planned attack on India, the independence, integrity, and excellence of Indian institutions, as well as the growth story and aspiration of India.
"The claims and hints that were presented as facts spread like wildfire, erasing a substantial portion of investor wealth and generating profits for Hindenburg. Overall, public investors suffer losses while Hindenburg profits unexpectedly.
According to Hindenburg's study, the Adani enterprise participated in "brazen stock manipulation and accounting fraud scheme," making it the "largest swindle in business history." Additionally, it charged Adani with piling debt on businesses, placing the entire company on "precarious financial footing."
The US company listed a number of transactions related to Adani's Carmichael mine and rail operations in Queensland that it claimed may have enabled Adani to avoid telling investors that some of the Australian assets had lost value. The Indian conglomerate contests this accusation.
In its public response, Adani stated that the transactions were legal and conducted on arm's length terms.
Gautam Adani, the third-richest man in the world before the aftermath of the article erased more than US$22 billion from his own net worth, has lost billions of dollars in value as a result of the charges made by the short seller against his vast enterprise. According to Forbes, the Indian industrialist is currently the seventh-richest person in the world.
The billionaire chairman of the Adani companies and the Adani companies are thought to be connected to Indian Prime Minister Narendra Modi.
The research has had a negative impact on the larger Indian market, which has otherwise produced great returns recently for emerging markets.
Before publishing its analysis, Hindenburg acknowledged that it had taken a short position in Adani firms. Financial instruments are used by activist funds like Hindenburg to profit from decreasing share prices in the corporations they target because they feel these firms are grossly overvalued and engage in dishonest or unethical business practices.
Hindenburg, which was named after the 1937 airship catastrophe, searches for stocks that might fall.
In addition to answering Hindenburg's inquiries, Adani's lengthy statement includes evidence in the form of judicial decisions and company report excerpts.