Adani Group stocks surge after court panel finds no proof of price manipulation

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Adani Group shares rallied on Monday, extending gains spurred by an Indian court panel’s report that found no conclusive evidence of stock-price manipulation as alleged by US short seller Hindenburg Research.

The 10 Adani stocks have added more than $10 billion to their market value in today’s session so far, poised to be the biggest increase since Hindenburg’s scathing report in January. Flagship Adani Enterprises Ltd. surged about 19 ercent, adding to its gain on Friday. Traders said that trapped short positions were unwound aggressively, and investors were inclined to take new long bets on the group.

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The interim report “is helping because the fear of further inquiries against the group will reduce,” said Deepak Jasani, head of retail research at HDFC Securities Ltd. “It’s given the group a clean chit of sorts. While the change in perception from foreign investors will be gradual, this is a pretty significant step.”

In its 173-page report, the committee said that based on the data from the markets regulator Securities and Exchange Board of India, or SEBI, it saw “no evident pattern of manipulation in the steep stock-price rise” in billionaire Gautam Adani’s companies that can be attributed to “any single entity or group of connected entities.”

This referred to a central allegation of Hindenburg — the US short seller that claimed wide-ranging corporate malfeasance by the Adani Group in a January 24 report — that offshore shell companies tied to Adani family were bidding up the empire’s shares.

That said, investigations are still ongoing. SEBI itself has an August 14 deadline from the Supreme Court to close its probe on any securities law violation by the Adani Group, as well as any unusual market activity in its stocks.

Adani Green Energy Ltd., Adani Transmission Ltd., Adani Total Gas Ltd., and Adani Power Ltd. rose by their 5 percent limit while Adani Wilmar Ltd. surged 10 percent. Adani Ports and Special Economic Zone Ltd. jumped as much as 9.5 percent.

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