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(Bloomberg) — It was one of the most impactful short-seller reports ever: Hindenburg Research’s 2023 broadside against the Adani Group erased as much as $153 billion of market value.

But it turns out American short-seller’s gains from the saga just over $4 million.

That figure, which hasn’t been independently confirmed by Bloomberg News, was disclosed by Hindenburg in a statement on its website Monday. It’s the first time the New York-based firm, founded by Nathan Anderson, has provided a tally of its winnings from last year’s bombshell report alleging fraud and market manipulation at the Indian business empire of Gautam Adani — one of Asia’s richest tycoons.

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The contrast between Hindenburg’s gains and the wider impact underscores how opportune research can have far-reaching effects, even if it’s not always easy to profit from the fallout. Shares and bonds of Adani Group companies swung wildly in the immediate aftermath of Hindenburg’s report but have recovered ground since. As of Monday, the group market value was at $205 billion — about $30 billion short of their pre-Hindenburg level.

The scathing report earned a gross revenue of about $4.1 million through gains related to Adani shorts from “one investor relationship” — Hindenburg didn’t name who —  and about “$31,000 through our own short of Adani U.S. bonds,” the short-seller said in the July 1 statement.

Hindenburg also called out India’s markets regulator for failing to address the fraud allegations in its report last year.

Securities and Exchange Board of India, or Sebi, “seems more interested in pursuing those who expose such practices” while its investigation into billionaire Adani’s empire has hit a wall, it said. 

Hindenburg posted on its website the full show cause notice it said it received from Sebi in June, which states that Hindenburg’s report on the Adani Group had certain misrepresentations and inaccurate statements that were meant to mislead readers. Bloomberg has not independently confirmed the veracity of the notice. 

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Adani Group stocks shrugged off the latest missive from Hindenburg. Shares of all 10 Adani-linked firms traded higher on Tuesday, led by the energy and gas units that rallied more than 4% each.

‘Masking Kotak’

Hindenburg said that Sebi’s notice “conspicuously” failed to mention Kotak Mahindra Bank Ltd., which it said created and oversaw the offshore fund structure used by Hindenburg’s investor partner to bet against Adani. The regulator “masked the ‘Kotak’ name with the acronym “KMIL”,” it added, though Kotak is the body with ties to India. 

KMIL refers to Kotak Mahindra Investments Ltd., the asset management company. Kotak Mahindra Bank’s shares slipped as much as 3% on Tuesday after Hindenburg’s disclosures. 

Sebi’s notice also named US hedge fund Kingdon Capital Management as an involved party, stating that Kingdon knew about Hindenburg’s research on the Adani Group before it was published and had a profit-sharing pact with the short-seller on its trades. 

It’s unclear if Kingdon, which is run by financier Mark Kingdon, is the investor mentioned by Hindenburg linked to the $4.1 million in gains.

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The Indian markets regulator didn’t immediately respond to Bloomberg’s request for comment. Representatives for Kotak and the Adani Group did not immediately respond to requests for comment. Kingdon Capital Management was not immediately reachable outside of US business hours. 

Hindenburg’s latest broadside comes at a time when India’s newly energized opposition parties have been criticizing Prime Minister Narendra Modi for crony capitalism, after the leader was returned to power with a smaller mandate than expected last month. 

—With assistance from Ashutosh Joshi and Preeti Singh.

(Updates with details throughout.)

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