Adani Enterprises (NSE: ADANIENT) shares are one of the Adani Group shares trending lower today. The background effect is, of course, that Hindenburg short selling report upon the 10 associated companies as a whole. For those unaware the allegation is that there's unacknowledged roundtripping of loans and equity stakes which serve to bolster the varied share prices. Of course, when the allegation was made all of those different ten stocks fell. There's been some recovery in the face of repeated and stout denials from the Adani Group as a whole as well as the individual corporations themselves.
There was also a further tweak to the story. The Adani Group insisted that not only were the allegations untrue, anyway, they'd paid off those varied loans secured against the cross-linked shareholdings. The Ken then intimated that this might not be wholly true as the banks concerned had not filed the correct paperwork to show that the shares were no longer being held as security against such loans.
Adani Enterprises share price from Google
Today has seen further weakness across the Adani Group's listed entities. Adani Enterprises itself is down that 1.6%. Adani Green Energy 3.3%, Adani Transmission 4.3%. One part of this could be consideration of the recent news of a Sebi investigation into related party transactions with offshore entities.
What does make this continuing decline a little odd is that there's been a vote of confidence in the group. An investor - Rajiv Jain of GQG Partners - investing heavily, some $2 billion, into the group shares. Jain is musing on a possible 100% return on those stocks. Clearly, the assumption is that Hindenburg is wrong, or at least that any related party transactions are either now unravelled or not material. Equally obviously it's such differences of opinions that make markets. But the continuing share price decline across the different group entities shows that there are those who distinctly disagree with that opinion.
The next evaluation we're likely to have is over a mooted debt issue. The price at which lenders are willing to sign up will give us a good indication of what other investors think is the background truth here.
