After last year's Adani Jolt, Hindenburg Research has hinted at another major revelation concerning India. On Saturday, the US-based short seller teased this potential development in a post on X (formerly Twitter), stating, "Something big soon India.” On January 24 last year, Hindenburg Research released a report that heavily criticised the Adani Group, just before Adani Enterprises was set to conduct a share sale. The report caused a dramatic $86 billion drop in the market value of Adani Group's stocks and triggered a substantial sell-off of its bonds listed overseas.
The Securities and Exchange Board of India (SEBI) has disclosed new details in the ongoing Adani-Hindenburg saga, highlighting the links between the US-based short-seller Hindenburg Research and New York hedge fund manager Mark Kingdon. SEBI's findings indicate that Hindenburg provided Kingdon with an advance copy of its report on the Adani Group about two months before its public release. This early access allowed Kingdon to reap substantial profits through strategic trading potentially.
In a 46-page show-cause notice, SEBI detailed that Hindenburg Research and Kingdon Capital Management had entered into a "Research Agreement" in May 2021. This agreement enabled the exchange of a draft report that closely resembled the final version released in January 2023. The report alleged that the Adani Group had carried out "the largest con in corporate history," resulting in a market value loss of over $150 billion across Adani’s listed companies.
SEBI's notice discloses that Kingdon Capital, which held significant stakes in Kotak Mahindra Investments Limited (KMIL), benefited from the market volatility triggered by the report. Kingdon Capital reportedly invested $43 million to establish short positions in Adani Enterprises Ltd (AEL) before the report's release, closing these positions with a profit of $22.25 million. The notice also includes time-stamped communications between hedge fund employees and KMIL traders concerning the sale of futures contracts related to Adani Enterprises.