13 august 2024 : Contrary to the apprehension, the latest Hindenburg Research report largely had minimal effect on the Indian stock market on Monday. The fear among investors, specifically the small ones, was that the market may react negatively to the report released on Saturday just like it had when the first report was published in January 2023.
Despite volatile trades through the day, Monday saw the Sensex close a marginal 57-point lower at 79,649 points, a clear indication that the market successfully managed to ignore the US short-seller’s latest report accusing chairperson of India’s capital markets regulator Securities and Exchange Board of India (SEBI), Madhabi Puri Buch, of conflict of interest while investigating alleged wrongdoings by Adani Group in its first report.
This time Hindenburg had accused Buch and her husband Dhaval Buch of having stakes in offshore funds used in the alleged Adani Group money siphoning scandal.
Amid the expected political mudslinging though stock prices of some Adani Group companies witnessed selling it was not as severe as the January-February of 2023 after the publication of first report, the allegations of which were denied by the Adani Group.
Why this may have happened
While one of the reasons could be the “investors faith in the Indian economy”, experts say the latest Hindenburg report was released on a Saturday, giving investors and others sufficient time over the weekend to process and react.
In other words, there was no surprise element when the markets opened on Monday, a reason why after an initial negative start a recovery was also reported.
Ignoring the controversy generated by the Hindenburg report on SEBI chairperson, the experts say the markers took cues from global markets and the anticipated ease in CPI inflation supported by a good monsoon in the domestic arena.
Perhaps, the investors also saw it as another attempt by the US-based short seller to “manipulate” Indian markets. The BJP, in fact, claimed that the Hindenburg charge and Congress-led opposition’s criticism of the market regulator were “part of a wider conspiracy.”
The latest Hindenburg allegation
Eighteen months into its January 2023 report on the Adani Group, Hindenburg on Saturday alleged that Buch and her husband had stakes in offshore funds used in the alleged Adani money siphoning scandal.
Amid the Opposition attack on the Narendra Modi government over the issue, the BJP hit back questioning the authenticity of the report and alleging that George Soros, (known for “anti-India propaganda”), was the main investor in Hindenburg Research.
