This study examines the effects of the Hindenburg Research report on a major Indian conglomerate and its broader impact on the Indian financial market. We analyse how the report’s revelations regarding the Adani Group triggered a cascading ripple effect within the conglomerate and across the market. Our findings indicate that politically connected firms experience positive cumulative abnormal returns (CARs) following the release of the Hindenburg Research report. In contrast, the broader Indian equity market indices display consistently negative abnormal returns, with the impact intensifying in the days following the event. Additionally, results show that firms engaged in share pledging experience negative CARs after the Adani-Hindenburg report, whereas politically connected firms engaged in pledging activities show no reaction to the event. The negative news impact spreads across all market segments and capitalizations. These results suggest that, despite widespread market declines, politically connected firms achieve higher CARs, highlighting a market reassessment and a potential protective effect of political connections amid the scandal.