Adani Group stocks plunged sharply during trading on Wednesday, January 25, amid a report by Hindenburg Research targeting the conglomerate owned by billionaire Gautam Adani and alleging financial fraud. Hindenburg, is a well known short-seller in the United States.The report suggested that the short-seller is holding short positions in the Adani Group stocks through US traded bonds and non-Indian-traded derivative instruments. Short-selling refers to investment activity in which the investor borrows securities and sells them in hope of purchasing the securities at a lower price in the future. Adani Ports plunged about five per cent to Rs 725 in Wednesday’s trade, before making a mild recovery to Rs 731.05 level, as of 9.55 am, according to a report in the Business Today. Adani Enterprises plunged three per cent to Rs 3357.10 during the session, ahead of its Rs 20,000 crore follow-on public offering (FPO), opening on January 27. Among other Adani Group stocks, Adani Wilmar lost four per cent to Rs 551.35, whereas Adani Power also posted similar cuts to trade at Rs 264 on Wednesday, the report added. Gautam Adani’s latest acquisition, New Delhi Television (NDTV), also dropped four per cent.Adani Group stocks were hit hard as the Hindenburg report flagged risks to the financials of key companies. Key listed Adani companies have taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on a precarious financial footing, the Hindenburg report said. The activist short-seller behind Hindenberg is known for going after corporate fraudsters and research reports that send companies’ stocks tanking.The report comes as Adani, whose net worth of around $118 billion ranks him as Asia’s richest person, pushes forward with a fundraising drive to fuel the rapid expansion of his existing industrial and fossil fuel outfits as well as green energy businesses.“Even if you ignore the findings of our investigation…[Adani Group’s] key listed companies have 85 per cent downside purely on a fundamental basis owing to sky-high valuations,” the Hindenburg report stated. Gautam Adani has maintained that his companies’ valuations are justified. The business magnate had announced plans last year to increase the amount of freely-traded shares in Adani Enterprises after the company’s share price gained more than 3,300 per cent in three years, according to a report in the Financial Times. The FT report added that the shareholdings by several Mauritius-based investment funds that have for years held stakes in Adani Enterprises and other listed Adani Group companies have come under scrutiny from Indian regulators in the past. The Adani Group derives much of its revenues from mining and burning coal. However, the company is looking to diversify and become one the world’s largest green energy players by investing $70 billion by 2030 in sectors ranging from green hydrogen to solar panel manufacturing.