Adani-Hindenburg Saga: Supreme Court-appointed expert committee constituted to look into the Adani group shares crash triggered by the Hindenburg Research report has said empirical data showed that retail investors' exposure in the group has increased after January 24, 2023, when the report came out.

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The committee also concluded, based on empirical evidence, that the Indian market as a whole was not "unduly volatile". "The volatility in the Adani stocks was indeed high, which is attributable to the publication of the Hindenburg report and its consequences," the committee said in its report which was submitted to the apex court in early May. The market has re-priced and re-assessed the Adani stocks.

"While they may not have returned to the pre-January 24, 2023 levels, they are stable at the newly re-priced level," the committee added. It also said volatility is not an "inherent vice" for the market. "Market participants place buy and sell orders in line with their demand and supply, and based on their assessment and expectations, which is in turn, based on their assessment of the information available to them, and its anticipated impact."

The committee also said that at this stage, taking into account the explanations provided by SEBI, supported by empirical data, prima facie, it would not be possible for the panel to conclude that there has been a regulatory failure around the allegation of price manipulation. "Empirical data shows that retail investors' exposure to Adani stocks has increased after January 24, 2023," said the report, dated May 6.

On March 2, the apex court directed the capital market regulator SEBI to investigate any violations of securities law by the Adani Group in the wake of the Hindenburg report, which led to a sizable wipeout of Adani Group's market value. On March 2, Supreme Court set up an expert committee on the issue arising from the Hindenburg Research report on Adani Group companies. The committee was headed by former apex court judge Justice AM Sapre. The top court had then asked SEBI to file a status report within two months.

SEBI had sought an extension to conclude the investigation in the report by US short-seller Hindenburg Research. SEBI recently submitted before the Supreme Court that the application for extension of time filed by SEBI is meant to ensure carriage of justice keeping in mind the interest of investors and the securities market since any incorrect or premature conclusion of the case arrived at without full facts material on record would not serve the ends of justice and hence would be legally untenable.

Upon hearing SEBI's fresh application, the top court on Wednesday granted an extension of time for three months to conduct the probe. The January 24 Hindenburg report alleged stock manipulation and fraud, among other allegations, by the conglomerate.

The Adani Group had then termed Hindenburg as "an unethical short seller", stating that the report by the New York-based entity was "nothing but a lie". A short-seller in the securities market books seeks to gain from the subsequent reduction in the prices of shares.