Hindenburg Report on Adani has nothing new, says former SEBI ED

Adani Enterprises withdrew its Rs 20,000 crore Follow on Public Offer or FPO after a board meeting on Wednesday night. Chairperson Gautam Adani said the move will safeguard investors with no impact on the business, but most group stocks wilt on concerns. Ambuja Cements bucks the trend as pledge fears recede.

Speaking on this and the pressure on the Adani group of companies to CNBC-TV18, JN Gupta, Former ED of SEBI, stated that there was nothing new in the Hindenburg Report. According to him, the market simply saw the report as a trigger point and sold their holdings accordingly.

It is noteworthy that the report has been cited as the reason for the recent sell-off in Adani stocks.

“The Hindenburg report,  if you look at it, provided only that material which got suspicion in the report and unfortunately market doesn't have the patience to sit on the judgment, they see a trigger and then panic starts,” said the former SEBI ED.

As per Gupta, there is no debt pressure in most Adani Group companies and he expressed confidence in the fact that the Indian market regulator having a sound risk management system in place.

“The worst part is that everybody is saying now that Adani is sitting on a bomb or hot potato of debt, all these things are panic creation. My own understanding of the balance sheet is that there is no pressure of debt in most of the company. The reason being they have got healthy cash flow and the most important thing is that, unlike any other businesses which have gone bust, all their businesses are brick and mortar business,” he explained.

Meanwhile, CNBC-TV18 has learned from sources that the Reserve Bank of India has sought information from banks on their exposure to the Adani Group. This information sought is part of the standard operating procedure or SOP to address new developments that are taking place.

The RBI is seeking information from banks as the central database may not have the latest information especially linked to pledge shares as the Central Repository of Information on Large Credits (CRILC) updates some data weekly or monthly.

The former SEBI ED is confident that the regulators are keeping a close eye on the situation and that the market is likely to stabilise in the near future.

Shares of Adani Wilmar and Adani Power have been in the lower circuit for the sixth straight session. The shares have fallen in ten out of the last eleven sessions.