Will Hindenburg Research Report Affect Adani Enterprises FPO?

after a heavy beating in Adani Group Stocks are showing impact Adani Enterprises The FPO (Follow-on Public Offer) has opened today. The follow-on issue has been subscribed only 0.01 times while its employee portion has been subscribed 0.03 times till 01:18 PM on the first day of bidding.

According to stock market watchers, the Hindenburg Research report may impact the subscription of Adani Enterprises FPO, but a strong rally in the stock cannot be ruled out as soon as the fundamentals of the stock remain intact. He said that the Hindenburg Research report and its findings should be probed by the market regulator. SEBI As the US-based research firm has also taken short positions in Adani Group shares. He predicted that SEBI may come forward and ensure the safety of retail investors’ money in this Adani-Hindenburg fallout.

Suggesting investors to look at long term rather than short term triggers Sandeep Pandey, Former Deputy Vice President HDFC Bank Ltd. said, “Adani Group continues to be the poster boy of the stock market indian stock market Rallying in the post-Covid era. Hence, they are without doubt in overbought position and hence Adani Group shares are sensitive to any short term triggers (either positive or negative). An investor needs to look at the current Hindenburg Research report on Adani Group shares from the same angle. Short sellers have expressed concern over the debt position of Adani group companies and hence panic selling has started. so, i’m hoping Indian market Regulator SEBI will play a big role in the current bloodshed on Dalal Street. I believe once SEBI goes ahead, which is clearly visible after the panic selling, Adani Group shares will see a strong rally. Hence, FPO investors are advised to wait and see how long this panic selling continues and how long it takes the market regulator to respond to this Hindenburg Research report.”

Sandeep Pandey, Who? Currently working as director at Basava Capital further added that Hindenburg Research may continue to influence for short term but trend reversal is expected soon after SEBI’s reaction on the matter. He advised investors to stick to their convictions after scanning the financial position of Adani group companies.

According to the InGovern response to the Hindenburg Research on the Adani Group, “The strategically timed release of the Hindenburg Report on the eve of a follow-on public offering (FPO) by Adani Enterprises Limited indicates that there was some purpose of scaring investors. However, the Hindenburg The report itself may not influence FPO share sales.”

The InGovern report further states that the January 25, 2023 anchor book has already been oversubscribed given that many long-term investors will aim to hold the stock for several years.

“While the Hindenburg Report talks about high valuations and high leverage by the Adani Group, the nature of industries in which Adani Group companies operate and data on debt holdings in Adani Group companies indicate otherwise,” InGovern reports stated in.

Global brokerage firm Jefferies has also reacted to Hindenburg Research on Adani Group, stating, “Following recent concerns, Adani Group shares details of debit and leverage levels. Consol debt Rs. 1.6tn (ex. Shareholder sub-debt) and debt/EBITDA reduced from 4.3x in FY2016 to 3.2x in FY22. Acquisition of cement business may add Rs 600 billion to debt but also increase cash flow . Diversification of lending-mix has reduced the share of Indian banks to 33% of loans and 0.5% of loans. Sector loans; rest with bonds/foreign banks. We look for progress, but less for banks See the risk.” This could be a big relief for the Adani group as it predicted no sale of Adani shares pledged with banks in the near term.

Adani Enterprises share price outlook

When asked about what the technical chart suggests regarding Adani Enterprises shares, Vaishali Parekh, Vice President – ​​Technical Research at Prabhudas Lilladher said, “Technically, the stock had a major support area on the daily chart. from 3130 3250 level, which has been decisively broken and has also moved below the crucial 200DMA level. 3050. The next major support will be near according to the Fibonacci retracement levels 2540 zone, which if holds can see a pullback. But for bias and trend correction from here, it would need to decisively break at least the 3450 area to establish at least some explanation.”

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to do due diligence with certified experts before making any investment decision.