On Monday, companies within the Adani Group experienced a decline of approximately $19 billion in market capitalization; however, they managed to recover a significant portion of these losses following allegations from Hindenburg Research.

The firm accused the head of India's market regulator, who is investigating the group, of having connections to offshore funds that are also associated with Adani.

During morning trading, Adani Enterprises saw a decrease of 2%, while other entities such as Adani Ports, Adani Total Gas, Adani Green, Adani Power, Adani Wilmar, and Adani Energy Solutions experienced declines ranging from 2% to 4.5%.

Adani Enterprises and Adani Ports were among the largest decliners on the Nifty 50 index, which ultimately rebounded from initial losses to close up by 0.4%.

The total losses during the morning session were reduced to $9 billion after the initial drop. Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, commented, "The allegations are resurfacing for the second time. Numerous investigations have taken place over the past year and a half. This reaction is likely temporary and we expect a return to normalcy."

Hindenburg referenced whistleblower documents, stating that Madhabi Puri Buch, Chair of the Securities and Exchange Board of India (SEBI), and her husband held interests in an offshore fund that received significant investments from associates of Vinod Adani, the brother of Gautam Adani, the group's billionaire founder.

Buch dismissed the allegations as unfounded, while Adani refuted the claims on Sunday, asserting that its overseas holding structure is entirely transparent.

SEBI urged investors on Sunday to remain composed and to exercise caution before responding to such reports.

In January 2023, Hindenburg had previously alleged the misuse of tax havens and stock manipulation by the Adani Group, resulting in a $150 billion decline in stock value.

The Adani Group has denied all such allegations, and shares have seen a partial recovery. The 2023 report also prompted an ongoing inquiry led by Buch. Hindenburg stated on Saturday, "We do not believe SEBI can be regarded as an impartial arbiter in the Adani situation."

Hindenburg Research's allegations against the Adani Group have been thoroughly examined, as stated by SEBI on Sunday.

Analysts have noted that the recent accusations against Buch have caused anxiety among retail investors. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, remarked, "We are likely to observe a short to medium-term impact on the sentiment surrounding Adani stocks, particularly as retail investors feel the pressure from the allegations directed at SEBI."

Furthermore, the allegations have attracted political attention, with opposition leader Rahul Gandhi commenting on X, "The integrity of SEBI, the regulatory body responsible for protecting the assets of small retail investors, has been severely undermined by the allegations against its chairperson."

On Monday, Ajay Seth, India's Secretary for Economic Affairs, stated, "The regulator and the individual involved have issued a statement. The government has no additional comments to provide."