What is SEBI Looking into with the Adani-Hindenburg Case?

The Supreme Court (SC) has instructed the Securities and Exchange Board of India (SEBI) to wrap up its investigations into the 2 out of the 24 queries by Hindenburg Research concerning the Adani Group within three months. These investigations, currently at an interim stage, involve allegations of breaching minimum public shareholding (MPS) regulations with overseas entities and scrutinising trades surrounding the release of the Hindenburg Report. SEBI’s status report, submitted to the SC in August last year, outlined these issues.

In the case of alleged MPS Regulation violations, the Adani SEBI investigation disclosed that SEBI had requested information from five foreign jurisdictions regarding foreign portfolio investors (FPIs) holdings in the firm. However, determining the economic interest of 12 FPIs in tax haven jurisdictions remains challenging. These FPIs were categorised as public shareholders of Adani Group firms. Hindenburg’s allegations suggested a circumvention of regulatory norms through FPIs.

SEBI’s International Outreach and Ongoing Investigations

SEBI indicated that it had dispatched approximately 90 communications to overseas agencies for assistance in this regard. Regarding the second ongoing investigation, SEBI noted sending three communications to external agencies, awaiting information. The regulator aims to ascertain the unusual short positions of certain entities in the Adani Group during the time of the US-based firm’s report release.

In August 2023, Adani SEBI investigation resulted in the furnishing of a status report to the apex court, disclosing the conclusion of investigations in 22 out of 24 matters related to allegations against the Adani Group. Among the concluded investigations, 13 pertain to alleged failures in disclosing related party transactions; two involve stock price manipulation allegations, five relate to possible insider trading, and one each concerns FPI regulations and takeover regulations.

Focus on Investigations

SEBI is looking into the Adani-Hindenburg question in several ways, focusing on other parts of the claims against the Adani Group. People accused of breaking minimum public sharing (MPS) rules are getting much attention. Concerns were made in the Hindenburg report about the role of foreign companies in Adani Group companies and how well they followed MPS rules. SEBI is looking into these claims very carefully to see if they are true and to see if any regulations were broken.

Another important part of SEBI’s investigation is looking into the trades before and after the Hindenburg report. When the news came out, it shocked the market and caused the share prices of Adani Group companies to change. SEBI is closely looking at these deals to see if there were any problems or cases of market manipulation that might have happened before or after the report came out. Adani SEBI investigation intends to find instances of secret trading or coordinated attempts to change how people feel about the market by looking at trade trends and numbers.

SEBI also carefully checks the holding structures of foreign portfolio investors (FPIs) with significant shares in Adani Group companies. There have been concerns about the real winners of these investments and whether they follow the rules set by regulators. The Securities and Exchange Board of India (SEBI) is trying to figure out who owns these stocks and who controls them so that it can see if they are following the rules.

What’s Next?

As SEBI’s investigation into the Adani-Hindenburg issue continues, everyone involved is eagerly anticipating the result and what it might mean. To look into the claims and restore faith in the honesty of India’s financial markets, a thorough and open review is needed. SEBI can show its dedication to protecting investors and keeping the market honest by maintaining the highest control and regulatory oversight standards.

Going forward, it will be very important for legal officials, market players, and foreign partners to work together to find an answer to the problem. Stakeholders can strengthen and stabilise the financial environment by encouraging fairness, responsibility, and following the rules set by regulators.

Towards the Future: Possible Results and Market Effects 

The conclusion of SEBI’s probe is expected to impact investor confidence significantly, the Adani Group, and the larger Indian financial industry. The repercussions can include harsher laws and large fines if significant proof of misconduct is discovered. On the other hand, a positive report from SEBI can contribute to reviving confidence in the Indian market and the Adani Group. Transparency at every stage of the process is essential to guaranteeing an impartial and equitable conclusion, regardless of the outcome. This will play a crucial role in preserving the integrity of the Indian capital markets and promoting a safe and sound investment climate.


The Adani-Hindenburg problem has put the Adani SEBI investigation in the spotlight, leading to a thorough probe into claims of breaking the rules and manipulating the market. SEBI is looking into many different areas of the case, such as whether MPS rules were broken, trading that happened around the time of the Hindenburg report’s release, and the ownership structure of FPIs. Even though the investigation method is complicated, people involved are still hoping for a fair and open outcome that protects the honesty and trustworthiness of India’s capital markets.

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