Shares of all Adani Group companies were trading in deep red on Thursday, October 26, with stocks falling over 2 per cent each. Adani Enterprises, the flagship company was trading nearly 3 per cent down at Rs 2,201 on the National Stock Exchange (NSE).
The stock has slipped over 8 per cent in the last 5 sessions and over 10 per cent in the last month. Adani Ports & SEZ shares are also trading over 1 per cent down. The stock has lost over 4 per cent in the last five sessions.
Share of Adani Energy Solutions was 2.71 per cent down, Adani Gas was 4 per cent down, and Adani Green Energy tanked 3.7 per cent.
Adani Total Gas plunged over 5 per cent to touch a two-year low of Rs 522. The stock has lost over 85 per cent on a year-to-date basis.
Adani Power shares fell over 6 per cent, Adani Wilmar was 4.6 per cent down, and Ambuja Cement was 1.50 per cent down.
The sharp losses came after a Bloomberg report on October 25 said that the EY member firm which audits some Adani Group companies is being scrutinized by the accounting regulator National Financial Reporting Authority (NFRA).
In recent weeks, NFRA started an inquiry into one of the member firms of EY in India, SR Batliboi, and requested files and communications regarding its audits on some of the companies controlled by Adani dating back to 2014, as per the report.
However, it is uncertain how long the NFRA’s scrutiny could take or what repercussions, if any, may be faced by the auditor and Adani's companies.
Currently, SE Batliboi audits five of Adani’s listed companies – Adani Power, Adani Green Energy, Adani Wilmar, and cement companies ACC and Ambuja Cements.
In response, Adani Group on Wednesday said that it has always conducted business in compliance with all applicable rules and regulations. The group denied any suggestion that its businesses have not acted as per the accounting standards of the jurisdiction in which they operate.
Adani Group in a media statement said that the Group is confident about its practices, governance, and disclosures.
"We strongly reject any suggestion that Adani Group and its businesses have not acted as per the regulations and accounting standards of the jurisdictions in which we operate. The Adani Group has always conducted its business in compliance with all applicable laws and regulations and is confident about its practices, governance, and disclosures," the statement said.
"On the weekly chart stock was in overbought condition , so a stiff resistance has been formed at the level of 2700-2750. Technically, once we cross above this resistance then only we can see another rally in this stock. Currently, support stands at 2000-2030, so traders should avoid this stock at current level and wait for support level to buy on dip," Ganesh Dongre, Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers.
This comes months after the conglomerate was thrown into turmoil by US shot-seller Hindenburg Research report accusing the group of misuse of tax havens and other business conducts. Adani Group has denied all the allegations.
In August, Delloite resigned as auditor of Adani Ports amid concerns over certain related party transactions that Hindenburg had raised and which the company did not wish to look into independently.