Hindenburg's New Claims: SEBI and Adani Under Fire

1. Earnings Calendar

   • Earnings season is in full swing, with several major companies scheduled to announce their Q1 FY25 results this week, including IRFC, NMDC, Apollo Hospitals, Hero MotoCorp, Reliance Power, Hindalco, and IRCTC.

2. New IPO

   • Saraswati Saree Depot’s IPO will be open for subscription during the first three days of the week. Please refer to our IPO section for detailed information.

3. Adani-Hindenburg Saga

   • In our featured highlight today, we examine Hindenburg’s latest report on the Adani Group and SEBI. The upcoming week will provide further insights into the responses from SEBI officials, retail investors, the market, and the broader public.

4. Independence Day

   • Markets will be closed on Thursday, August 15, in observance of Indian Independence Day. Consequently, there will be no newsletter on Friday unless special circumstances arise.

• On Friday, the markets saw strong, broad-based buying in trade, lifting the Sensex and Nifty 50 by over 1%.

• This positive movement followed significant gains in the US market overnight, driven by US Labour Department data showing a decline in weekly unemployment claims to a seasonally adjusted 233,000, beating expectations of 240,000. This eased recession concerns that had emerged after a weaker-than-expected July jobs report.

Eicher Motors Ltd +5.68%

• Shares jumped nearly 6 percent after the company posted better-than-expected results for the April-June quarter.

• The company reported a consolidated net profit of Rs 1,101 crore, a 20 percent increase year-on-year, driven by favourable commodity prices, inventory benefits, and positive volume growth in the Royal Enfield (RE) segment.

• Total revenue from operations rose by 10.2 percent to Rs 4,393 crore, compared to Rs 3,986 crore in Q1FY24.

Birla Corporation Ltd (4.83%)

• Shares fell 5 percent after the company reported a year-on-year decline in its consolidated net profit and revenue for the June quarter.

• In a press release, the company stated that "unusually weak cement prices and sluggishness in demand, coupled with an unprecedented downturn in the jute industry, weighed down Birla Corp's June quarter profitability."

• The Centre is restoring PSBs' power to issue look-out circulars. (ET)

• India is set to introduce UPI services in Maldives. (HT)

• Steel prices are trading at three-year lows due to increased supplies. (ET)

• Sebi has urged the mutual fund industry to take the initiative in performing stress tests. (YS)

• BEML plans to export Vande Bharat and Metro trains. (ET)

• Declining bank deposits are raising concerns about NBFCs' fundraising capacity. (ET)

Hindenburg Strikes Again: SEBI and Adani Group Under Scrutiny

• The 2022 Hindenburg report initially exposed the Adani Group's alleged use of offshore shell entities for undisclosed transactions and stock manipulation.

• Despite substantial evidence and media investigations, the Securities and Exchange Board of India (SEBI) has not publicly acted against the Adani Group.

• SEBI issued a 'show cause' notice to Hindenburg Research, criticizing the disclosure related to their short position.

• Hindenburg Research has now released additional findings, highlighting deeper concerns.

• The latest research suggests the Adani Group's use of offshore shell entities controlled by Vinod Adani, with further allegations of undisclosed transactions and stock manipulation.

• Whistle-blower documents indicate that SEBI Chairperson Madhabi Buch and her husband had stakes in offshore funds linked to the scandal, raising potential conflict-of-interest concerns.

• Under Buch's leadership, SEBI’s promotion of REIT regulations benefiting firms like Blackstone, where her husband has ties, has intensified transparency concerns.

Here is the full chronology of the Adani Hindenburg Saga.

• The Centre has approved a ₹10,501 crore ($1.25Bn) investment in ONGC Petro Additions Ltd. (ET)

• Tata Chemicals intends to raise ₹1,700 crore ($202Mn) through NCDs from investors. (BS)

• Ola Electric shares jumped 20% and hit the upper circuit on their stock market debut. (MC)

• Lemon Tree aims to list its subsidiary, Fleur Hotels, to cut debt. (BS)

This week’s mainboard IPO schedule

• Saraswati Saree Depot (RHP)

  • Offering Period: 12 August - 14 August, 2024

  • Listing Date: 20 August, 2024

  • Issue Price: 152-160

  • Lot Size: 90

M&A / Investments

• CVC Capital plans to acquire an additional 26% stake in Aavas Financiers for ₹3,664 crore ($436Mn). (BS)

• Radio Mirchi’s parent company has acquired Gaana for ₹25 lakh ($30k). (EN)

• HCLTech's subsidiary is set to acquire the French software firm Zeenea. (YS)

• NCLT has approved Oberoi Realty's subsidiary's acquisition of Nirmal Lifestyle Realty. (ET)

Debt

• In Q1 FY25, IIFL Finance transferred stressed commercial real estate loans to an ARC. (BS)

VC