Hindenburg Research’s 2023 allegations against the Adani Group resulted in a $153 billion loss in market value for the Indian conglomerate.
Despite the monumental market disruption, the New York-based firm disclosed on Monday that it made a profit of just over $4 million from the report.
This revelation marks the first time Hindenburg has provided a detailed account of its earnings from the bombshell report, which accused the Adani Group of fraud and market manipulation.
The firm’s founder, Nathan Anderson, confirmed the figure on Hindenburg’s website, shedding light on the relatively modest financial gain in contrast to the widespread market impact.
The scathing report, released in early 2023, caused significant fluctuations in Adani Group’s stock and bond prices.
While these securities have since recovered some ground, the conglomerate’s market value remains approximately $30 billion short of its pre-Hindenburg levels, now standing at around $205 billion.
According to Hindenburg, the bulk of its profits, amounting to about $4.1 million, came from gains related to short positions on Adani’s stocks through “one investor relationship.”
Also, the firm earned around $31,000 from shorting Adani’s U.S. bonds. However, Hindenburg did not disclose the identity of the investor involved.
The release of these figures coincides with Hindenburg’s criticism of the Securities and Exchange Board of India (SEBI), accusing the regulator of inadequately addressing the fraud allegations.
Hindenburg posted the full show cause notice it received from SEBI in June, which alleged that the report contained misrepresentations intended to mislead readers.
The authenticity of this notice has not been independently verified by Bloomberg.
In response to Hindenburg’s latest claims, shares of all 10 Adani-linked companies rose on Tuesday, with the energy and gas units leading the charge with gains exceeding 4% each.
Hindenburg also highlighted SEBI’s omission of Kotak Mahindra Bank Ltd. in its notice.
According to Hindenburg, Kotak was instrumental in creating and managing the offshore fund structure used by its investor partner to short Adani.
Hindenburg criticized SEBI for using the acronym “KMIL” instead of directly naming Kotak Mahindra Investments Ltd., the asset management company.
The SEBI notice also implicated U.S. hedge fund Kingdon Capital Management, suggesting that the fund had prior knowledge of Hindenburg’s research and had a profit-sharing agreement with the short-seller.
The details of Kingdon’s involvement remain unclear, as the firm could not be reached for comment outside U.S. business hours.
The Adani Group, SEBI, and Kotak Mahindra Bank have yet to respond to these developments.
Hindenburg’s latest disclosure comes at a politically sensitive time in India, where opposition parties have criticized Prime Minister Narendra Modi for crony capitalism.
The controversy surrounding the Adani Group, led by one of Asia’s richest tycoons, Gautam Adani, continues to fuel debates about corporate governance and regulatory oversight in India’s rapidly growing economy.
