The American short-seller Hindenburg Research is named after the hydrogen airship that exploded mid-flight in 1937, killing 35 of the 97 people on board. The report the short-seller published on the Adani group was also an explosive one. The share prices of the group’s companies have witnessed a dramatic fall in the past fortnight in reaction to the report’s allegations of stock manipulation by shell companies and accounting fraud. 

Hindenburg published the report on January 25.  Adani Enterprises plunged by 18.5% in the following trading session on January 27. On the same day, Adani Enterprises’ Rs 20,000 crore follow-on public offer (FPO) opened for subscription. The stock snapped its two-day losing streak and rose 2.8% on January 31, as its FPO was fully subscribed. Retail interest in the FPO was low, and the subscription was mainly led by qualified institutional buyers (QIB) and high net-worth individuals. Abu Dhabi’s International Holding was one of the biggest contributors, investing Rs 3,307.6 crore in the FPO.

However, this share price recovery was short lived as Gautam Adani called off the FPO in the late hours of January 31. This caused Adani Enterprises to plunge 28% on February 1. The pressure grew as Credit Suisse’s private bank ceased margin loans on Adani Group bonds on February 2, causing the stock to plummet by 26.7%. It assigned a zero lending value for notes sold by Adani Ports, Adani Green Energy, and Adani Electricity Mumbai.

The stock received some respite as Gautam Adani announced the prepayment of $1.1 billion worth of loans on February 7. TV anchor Arnab Goswami had also mounted a nationalistic defense of the group on the Republic channel. These events helped Adani Enterprises to surge by 15.5%.

However, this rise didn’t last. Morgan Stanley Capital International (MSCI) said that it has reduced the weight of Adani Group stocks on the index, which will trigger a fund outflow from these companies. There will be a second MSCI review of the stocks in May. The stock plunged 12% on February 9.