New Delhi: Shares of Kotak Mahindra Bank on Tuesday declined over 2 per cent, wiping out Rs 7,777.33 crore from its market capitalisation as the company’s name cropped up in the Adani-Hindenburg row.

The stock went lower by 2.16 per cent to settle at Rs 1,769.60 apiece on the BSE. During the day, it tumbled 3.98 per cent to Rs 1,736.65. On the NSE, it declined 2.12 per cent to Rs 1,769.60 per share. The company’s market valuation eroded by Rs 7,777.33 crore to Rs 3,51,787.86 crore.

Billionaire banker Uday Kotak founded a bank and brokerage that created and oversaw an offshore fund used by an unnamed investor to profit from a plunge in Adani shares that followed a damning Hindenburg report, the US short-seller said.

Hindenburg Research, which had in a January 2023 report alleged stock market manipulations and accounting fraud at the Adani group, said it has received a show cause notice from Indian markets regulator Securities and Exchange Board of India (Sebi) over gains made from betting on the conglomerate’s shares.

The US short-seller said it had disclosed that it had bets against the group, adding that its gains were only over USD 4 million. While Kotak Mahindra Investments Ltd (KMIL) – the asset management company is said to have created the offshore fund — stated that Hindenburg was “never” its client, Sebi’s show cause notice cited chats between Kingdon Capital — a client of the US short-seller who was privy to the report before its release — and Kotak fund executives.

Calling the Sebi show cause notice as attempted intimidation, Hindenburg asked why the market regulator did not name Kotak. Sebi’s notice “conspicuously failed to name the party that has an actual tie to India: Kotak Bank, one of India’s largest banks and brokerage firms founded by Uday Kotak, which created and oversaw the offshore fund structure used by our investor partner to bet against Adani,” Hindenburg said.

Meanwhile, other bank stocks also declined on Tuesday, with Bank of Baroda slumping 2.65 per cent, IndusInd Bank (1.89 per cent), State Bank of India (1.87 per cent), ICICI Bank (1.79 per cent), Canara Bank (1.69 per cent), Federal Bank (1.55 per cent) and Axis Bank (0.63 per cent). The BSE Bankex index ended lower by 0.91 per cent at 59,307.59.