Retail investors piled into Adani Group companies as their shares cratered in the wake of the Hindenburg Research’s scathing report last January. A year later, they’re still keeping the faith.

Individual holdings in nine of the group’s 10 stocks at the end of December are higher than they were before the short-seller’s attack on the conglomerate, exchange data compiled by Bloomberg show. 

The group’s market value has increased by more than $60 billion since late November, and is just $50 billion away from erasing the losses spurred by Hindenburg’s report. The recovery likely rewarded retail investors who used the selloff as a buying opportunity.

“Many of the retail investors came in after the crash,” said Chakri Lokapriya, managing director at Mumbai-based asset manager RedStrawBerry LLP and former fund manager at BNP Paribas Asset Management. “They have exhibited a sense of maturity to hold on given that infrastructure companies take longer to realise their earnings potential.”

While foreign investors, insurance companies and high-networth individuals pared their holdings in various group entities in 2023, the number of retail investors — those with at least ₹2,00,000 ($2,411) to invest — jumped 42 per cent to 6.7 million in Adani companies, data compiled by Bloomberg show.  

Hindenburg’s allegations of stock manipulation and fraud, repeatedly denied by the group, had wiped off more than $150 billion from its market value at one point. Billions of dollars in investments from marquee funds including GQG Partners LLC, and more recently, an observation from India’s top court that it won’t take media reports on Adani as the “gospel truth,” has renewed investor confidence in the group stocks.

To be sure, retail shareholding in the flagship Adani Enterprises Ltd and Adani Ports and Special Economic Zone Ltd fell from the levels reached at the end of March 2023, as the rally likely prompted some investors to book gains.

“Retail investors who bought into these stocks definitely made money,” said Ambareesh Baliga, an independent market expert. “But when you are buying momentum stocks, you should book profits from time to time.”

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