Friday, September 19, 2025

Adani Group Stocks Soar as SEBI’s Clean Chit Ends Two-Year Regulatory Cloud

Mumbai, India — In a landmark development that has sent a wave of confidence through the Indian stock market, the Securities and Exchange Board of India (SEBI) has reportedly cleared the Adani Group of all stock manipulation and related-party transaction allegations made by U.S. short-seller Hindenburg Research. The decision, which marks the end of a contentious two-year regulatory saga, has triggered a massive rally in Adani Group stocks, with some companies surging by as much as 13% in a single day.

The Final Verdict: A Clean Chit from the Regulator

On Thursday, September 18, 2025, SEBI, in its final orders, concluded that the allegations against the Adani Group were unsubstantiated. The investigation, which was initiated at the behest of the Supreme Court of India, focused on several key claims from the Hindenburg report, including the use of specific private entities (like Adicorp Enterprises, Milestone Tradelinks, and Rehvar Infrastructure) to facilitate fund transfers within the conglomerate.

SEBI’s probe found no evidence of stock manipulation, siphoning of money, or fraudulent accounting practices. The regulator clarified that the fund transfers Hindenburg had cited were legitimate loan transactions that were fully repaid with interest before the investigation even began.

A crucial part of SEBI’s finding was the interpretation of related-party transaction rules. The regulator noted that the definition of such transactions was significantly amended in 2021 to include indirect dealings, and applying this new rule retrospectively to older transactions would be legally impermissible. This effectively dismantled one of the core allegations of the Hindenburg report.

“The allegations made against the Noticees are not established,” SEBI’s order stated, providing a clear vindication for the Adani Group.

The Rally: A Market’s Vote of Confidence

The news was met with an emphatic response from investors. On Friday, September 19, 2025, the combined market capitalization of the Adani Group companies surged by over ₹69,000 crore in a single trading session.

• Adani Total Gas led the rally, with its shares soaring by over 13%.
• Adani Power and Adani Enterprises also saw significant gains, with increases of around 9% and 5% respectively.
• Other group companies like Adani Green Energy and Adani Ports & SEZ also recorded healthy gains, with the overall sentiment being overwhelmingly positive.

The end of the regulatory uncertainty has also led to renewed interest from institutional investors. Morgan Stanley, for instance, initiated coverage on Adani Power with an “Overweight” rating, citing the resolution of regulatory issues and the company’s strong fundamentals as key drivers for its positive outlook.

History and Background: The Hindenburg Saga Unfolds

This dramatic turn of events is the final chapter in a corporate controversy that began on January 24, 2023.

• The Hindenburg Report: U.S. short-seller Hindenburg Research published a 106-page report accusing the Adani Group of “brazen stock manipulation and accounting fraud.” The report alleged that the group used a network of offshore shell companies to artificially inflate the prices of its listed stocks. The report was timed to coincide with the Adani Enterprises’ mega follow-on public offer (FPO).
• The Fallout: The report triggered a catastrophic market sell-off, wiping out over $150 billion of the Adani Group’s market value at its peak. The FPO for Adani Enterprises was subsequently called off.
• Adani’s Defense: The Adani Group fiercely denied the allegations, calling the report a “malicious combination of selective misinformation and baseless allegations.” It published a 413-page rebuttal, asserting that all its financial disclosures and transactions were compliant with Indian laws.
• The Supreme Court’s Intervention: The controversy led to a public interest litigation in the Supreme Court of India. In March 2023, the apex court ordered SEBI to investigate the matter and set up an expert committee to review the regulatory framework.

Adani’s Response: “Those Who Spread False Narratives Owe the Nation an Apology”

Reacting to the SEBI order, Adani Group Chairman Gautam Adani took to social media to express his relief and a sense of vindication. “After an exhaustive investigation, SEBI has reaffirmed what we have always maintained, that the Hindenburg claims were baseless,” he posted.

Adani also expressed sympathy for the investors who lost money due to the short-seller’s “fraudulent and motivated report” and called on those who spread “false narratives” to apologize. The statement encapsulated the group’s long-held position that the entire episode was a calculated effort to harm its reputation and business.

The clean chit from the market regulator brings a much-needed end to the regulatory scrutiny, allowing the Adani Group to shift its focus back to its core business of infrastructure and nation-building. The market’s robust response suggests that investors are ready to move on from the Hindenburg saga and re-evaluate the conglomerate on its business fundamentals.