SWAIN SECURITIES

Adani-Hindenburg Saga Closes: SEBI’s Final Report Vindicates Group, Fuels Massive Rally 📈

In a monumental development that ends nearly three years of intense regulatory uncertainty, the Securities and Exchange Board of India (SEBI) on September 19, 2025, formally closed its investigation into the allegations leveled against the Adani Group by US-based short-seller Hindenburg Research. The final report delivered a significant clean chit, stating that the claims of stock manipulation and undisclosed related-party transactions could not be established.

This regulatory closure has profound implications for the Adani conglomerate, its investors, and the broader Indian financial markets, sparking an immediate and massive relief rally across all Adani Group stocks.

Key Findings: Allegations Dismissed

SEBI’s exhaustive probe focused on key allegations, primarily concerning the use of intermediate entities to route funds and potentially bypass disclosure norms for Related Party Transactions (RPTs).

The regulator’s final order made several crucial determinations:

No Violation of RPT Norms:

SEBI confirmed that the transactions flagged by Hindenburg—specifically loans routed through entities like Adicorp Enterprises, Milestone Tradelinks, and Rehvar Infrastructure—did not qualify as RPTs under the definition prevailing during the time they occurred (FY12-13 to FY20-21). The widened definition of RPTs, which includes indirect transactions, was introduced in 2021 and cannot be applied retrospectively.

No Fraud or Fund Diversion:

The investigation found no evidence of siphoning off money, fraudulent dealings, or manipulation of the stock price. SEBI noted that the questioned fund movements were legitimate loan transactions that were repaid in full, along with interest, before the investigation even began.

No Liability or Penalty:

As the allegations could not be established, the regulator disposed of the proceedings against the group and its executives, including Gautam Adani and Rajesh Adani, confirming no devolvement of liability or penalty.

The verdict provides substantial backing to the Adani Group’s long-held stance that the short-seller’s claims were “baseless” and politically motivated.

Market Impact:

A Renewed Confidence Boost
The regulatory clearance triggered a massive buying frenzy on Dalal Street. Adani Group stocks experienced a sharp relief rally, with the combined market capitalization of the listed entities surging by over ₹69,000 crore in the subsequent trading session.

Adani Power, Adani Total Gas, and Adani Enterprises were among the top gainers, with some stocks soaring up to 13%. This market response reflects a crucial shift in sentiment:

End of Regulatory Overhang:

For almost three years, the investigation had acted as a major overhang, keeping both domestic and foreign institutional investors (FIIs) cautious. The SEBI clean chit eliminates this uncertainty, paving the way for renewed institutional capital and liquidity.

Valuation Re-rating:

Analysts widely expect a significant re-rating of Adani stocks, as their valuations are no longer discounted due to regulatory risk. The focus is expected to fully shift back to the group’s robust fundamentals in the infrastructure, port, and renewable energy sectors—all critical to India’s growth story.

Institutional Re-entry:

Global investment banks, including Morgan Stanley, have already initiated or upgraded coverage on Adani stocks following the verdict, signalling a strong return of confidence among international stakeholders.

What’s Next for the Conglomerate?

While the SEBI verdict clears the most damaging set of claims related to the Hindenburg report, the Adani Group still faces a continuous focus on governance and transparency. However, this clearance provides the crucial credibility and stability needed for the conglomerate to aggressively pursue its massive capital expenditure and expansion plans, particularly in the green energy and infrastructure domain, thus cementing its role as a key driver of the nation’s economic engine.