Good morning [%first_name |Dear Reader%],

Yesterday (25 January) was a bittersweet day, likely more bitter than sweet, for the Adani group. Even as the much publicised Rs 20,000-crore ($2.4 billion) follow-on public offering (FPO) of its flagship Adani Enterprises (AEL) got rolling, the group found itself at the receiving end of a ferocious attack that pulled no punches. 

All the listed Adani stocks crashed on 25 January after US-based activist investor and short-seller Hindenburg Research released a report accusing Adani companies of brazen stock manipulation, accounting fraud, and money laundering over the course of decades. Hindenburg also said it was shorting Adani Group stocks, calling them highly overvalued. Shorting is essentially selling a stock or financial instrument on the expectation that it will fall in the future.

The damning allegations and inferences apart, the timing of the report seems particularly bad for the Adani group. The success of the FPO is crucial for Adani Enterprises, as I had written in late-November. It will help the company make a virtue (of broadening its investor base) out of a fundraising necessity.