The Securities and Exchange Board of India (SEBI) said that it has increased the scrutiny of the deals done by the Adani Group and will study a report issued by Hindenburg Research to add to its own ongoing preliminary investigation into the group’s foreign portfolio investors, according to two sources aware of the matter.

One of the two sources said- “SEBI has been increasingly examining all the transactions that Adani Group has been undertaking in the listed space,” though the person declined to be identified as the matter is confidential, the Reuters report noted. SEBI has been increasingly asking for disclosures that it ordinarily does not.

Hindenburg Research on Wednesday said that it held short positions in the conglomerate and published a report that mentioned that the Indian conglomerate is involved in some improper use of offshore tax havens and flagged concerns about high debt. 

This ended up causing a situation of panic selling in Wednesday’s market that disturbed the cumulative market capitalization of the 7 listed Adani Group companies by around Rs. 1 lakh crore. This downfall is being continued in Friday’s market as well as the group since Wednesday has lost around Rs.2.37 lakh crore.

Earlier this week Adani dismissed the Hindenburg report by saying it as baseless and said that the group is in talks about whether to take legal action against the New York-based firm or not.

In the case of Adani Group’s acquisition of Switzerland-based Holcim Limited’s stake in India’s Ambuja Cements Limited and ACC Limited, the regulator examined the offshore special purpose vehicle (SPV) used for the transaction, the first source said.

The group disclosed the use of this special-purpose vehicle as a part of the acquisition announcement in May 2022. The regulator had found as many as 17 foreign offshore entities involved in the funding of the transaction.

The regulator on these entities had sought clarity from the group when the group last year approached it for regulatory clearance. The sources said that these responses are under regulatory examinations .