BENGALURU, Feb 1 (Reuters) – Shares in Indian tycoon Gautam Adani’s conglomerate plunged again on Wednesday as the slide in his companies deepened to $84 billion following a report of short sales in the United States, and the billionaire also lost his title as the richest in Asia. person.
Wednesday’s stock losses moved Adani to 15th place on the Forbes rich list with an estimated net worth of $76.8 billion, below rival Mukesh Ambani, chairman of Reliance Industries Ltd (RELI.NS), which ranks ninth place with a net worth of $83.6 billion.
Prior to the critical report from US short seller Hindenburg, Adani was ranked third.
The losses mark a dramatic setback for Adani, the school dropout-turned-billionaire whose business interests stretch from ports and airports to mining and cement. Now, the tycoon fights to stabilize his business and defend his reputation.
It comes just one day after the group managed to muster investor support for a $2.5 billion share sale for flagship firm Adani Enterprises on Tuesday, in what some saw as a seal of confidence from investors.
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The Hindenburg Research report last week alleged misuse by the Adani Group of offshore tax havens and stock manipulation. He also raised concerns about high debt and the valuations of Adani’s seven publicly traded companies.
The group has denied the allegations, saying the short seller’s stock-manipulation narrative is “baseless” and stems from an ignorance of Indian law. He has always made the necessary regulatory disclosures, he added.
Shares of Adani Enterprises (ADEL.NS), often described as Adani’s business incubator, fell 30% on Wednesday. Adani Power (ADAN.NS) fell 5%, while Adani Total Gas (ADAG.NS) plunged 10%, below its daily price cap.
Adani Transmission (ADAI.NS) fell 6% and Adani Ports and Special Economic Zone (APSE.NS) fell 20%.
Adani Total Gas, a joint venture with France’s Total
“There was a slight rally yesterday after the share sale took place, after it seemed unlikely at one point, but now the weak market sentiment has become visible again after the Hindenburg report bombshell,” Ambareesh Baliga said. , an independent market analyst based in Mumbai.
“With stocks down despite Adani’s rebuttal, it clearly shows some damage to investor confidence. It will take a while to stabilize,” Baliga added.
SCRUTINY
Underlining jitters in some quarters, Bloomberg reported on Wednesday that Credit Suisse (CSGN.S) had stopped accepting bonds from Adani group companies as collateral for margin lending to its private banking clients.
Deven Choksey, managing director of KRChoksey Shares and Securities, said this was a major factor in Wednesday’s stock declines.
Credit Suisse had no immediate comment.
Scrutiny of the conglomerate is intensifying, and an Australian regulator said on Wednesday it would review Hindenburg’s allegations to see if further investigation was warranted.
The data also showed that foreign investors sold $1.5 billion net worth of Indian stocks after the Hindenburg report, the biggest outflow for four consecutive days since September 30.
The headaches for the Adani Group are expected to continue for some time.
India’s markets regulator, which has been scrutinizing deals by the conglomerate, has said it will add Hindenburg’s report to its own preliminary investigation.
State-owned Life Insurance Corporation (LIC) (LIFI.NS) said on Monday it would seek clarification from Adani’s management on the short seller’s report. However, the insurance giant was a key investor in the sale of Adani Enterprises shares.
Hindenburg said in his report that he had shorted Adani Group’s US bonds and non-Indian-traded derivatives.
Reporting by Chris Thomas in Bangalore and Aditi Shah in New Delhi; Additional reporting by Bharath Rajeshwaran and Aditya Kalra; Edited by Edwina Gibbs and Mark Potter
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