19 Sep 2025: Stocks of the Adani Group soared in early trading on September 19, 2025, after the Securities and Exchange Board of India (SEBI) dismissed key allegations made by U.S.-based short-seller Hindenburg Research. The regulator concluded that certain claims of stock manipulation, related-party transactions, and improper disclosures against Adani Group companies were either unsubstantiated or did not amount to regulatory violations under norms at that time.
What SEBI Found & Dismissed
- The Hindenburg report, published in January 2023, had accused several Adani Group entities of using offshore shell entities—Adicorp Enterprises, Milestone Tradelinks, Rehvar Infrastructure—to route funds between Adani affiliated firms, inflating share prices and hiding related-party relationships.
- SEBI’s investigation found that at the time of the transactions, the legal definition of “related party transaction” (RPT) did not include those entities under then-existing regulation. Thus, those transactions did not breach disclosure norms or other regulatory rules as per those laws.
- SEBI also observed that all loans flagged in the Hindenburg report were repaid with interest, and it found no diversion of funds, no unfair trade practices, and no insider trading violations.
- Consequently, SEBI dropped all proceedings against Adani Group companies regarding those specific allegations. No penalties were levied.
Market Reaction
- Shares of Adani Group entities rose sharply—by up to 13%—on the day of the announcement.
- Adani Total Gas led the gains with about a 10% spike in early trade.
- Adani Power saw nearly a 9% jump.
- Adani Enterprises, the group’s flagship, rose around 4-5%. Adani Green Energy, Adani Ports & others also saw significant gains.
Why It Matters
- Investor sentiment had been clouded by the Hindenburg allegations, which darker moments saw Adani’s market capitalization fall by tens of billions of dollars. The regulatory uncertainty weighed heavily on stock performance over the last two years.
- SEBI’s clean-chit could restore confidence, especially among institutional investors who had held back due to governance concerns.
Caveats & Ongoing Issues
- SEBI cleared specific allegations related to manipulation, related party transactions, and disclosure norms as per laws in force at the time. Some claims / probes are still not fully resolved (other orders or investigations may remain active).
- While the clean chit is a blow to critics, perception among some investors has been shaken; recovering full trust may take time. Some stocks, despite the rally, remain well below their pre-Hindenburg levels.
City / Local Angle: Mumbai and India’s Stock Hub
- Mumbai, India’s financial center, saw Dalal Street react strongly. Adani stocks were among the top gainers in both Sensex and Nifty indices despite declines elsewhere.
- Brokers in Mumbai reported heavy volumes in Adani counters as traders cheered SEBI’s decision. Local trading desks noted that this could renew foreign institutional investor (FII) interest, which had pulled back previously.
Summary
SEBI dismissed key allegations by Hindenburg Research against Adani Group, finding no regulatory violations. Shares spiked up to 13%, led by Adani Power and Adani Total Gas amidst renewed investor confidence.