A Supreme Court panel’s ruling on Friday that it was not “possible to conclude regulatory failure on allegation of price manipulation” led to a rebound in shares of Adani Group companies, with Adani Enterprises Ltd. leading the gains on Tuesday.
Adani Ports and Special Economic Zone Ltd (APSE.NS), one of the group firms, was briefly able to recover all of its market capitalization losses following a negative report by American short seller Hindenburg Research on January 24 as a result of the rise.
After Hindenburg raised multiple concerns about governance at the conglomerate earlier this year, the group’s listed companies saw a loss in market value of up to $147 billion. The group has denied doing anything improper.
Following the publication of the report, India’s top court ordered the Securities and Exchange Board of India (SEBI), the country’s market regulator, to look into the claims and present its findings to a six-person expert panel.
The panel looked at the regulator’s justifications for why there wasn’t a clear pattern of price manipulation contributing to the increase.
The panel stated the final chain of ownership for about 13 foreign organizations remains unclear in the investigation into foreign ownership of group stocks, citing the SEBI report.
Separately, the court on Wednesday gave the agency until August 14 to wrap up its investigation into the breaches of regulatory disclosures and securities laws.
Investors must have felt confident buying the undervalued (Adani) equities due to the high integrity of the panel members, according to VK Vijayakumar, chief investment strategist at Geojit Financial Services.