BENGALURU, Feb 1 (Reuters) – Shares in Indian tycoon Gautam Adani’s conglomerate fell again on Wednesday as the company’s plight deepened to $86 billion after a short-selling U.S. report, losing the billionaire title to Asia’s richest man. person
Share losses on Wednesday dropped Adani, chairman of Reliance Industries Ltd, to 15th place on the Forbes rich list with an estimated net worth of $75.1 billion, below rival Mukesh Ambani. (RELI.NS) It is in ninth place with a fortune of 83.7 billion dollars.
Prior to the critical report by US short seller Hindenburg, Adani was ranked third.
The losses mark a dramatic setback for billionaire dropout Adani, whose fortunes have soared in recent years in line with the share values of his businesses, which include ports, airports, mining, cement and power. Now the tycoon is struggling to stabilize his companies and protect his reputation.
The stock slides came a day after Adani Group managed to secure $2.5 billion in investor backing. share sale For flagship firm Adani Enterprises, what some see as a seal of investor confidence in a time of crisis.
Latest Updates
See 2 more stories
A report last week by Hindenburg Research it is claimed illegal use and manipulation of shares by a group of offshore tax havens. It also raised concerns about high debt and the valuations of Adani’s seven listed companies.
It’s in the group denied the charges, said the short seller’s story of stock manipulation had “no basis” and was based on ignorance of Indian laws. He always made necessary regulatory disclosures, he added.
Shares in Adani Enterprises (ADEL.NS)Adani, often described as an incubator of businesses, fell 28% on Wednesday, taking its losses since the Hindenburg report to more than $18 billion. Adani Ports and Special Economic Zone (APSE.NS) decreased by 19%. Both stocks had their worst day yet.
“The decline we have seen in Adani shares is scary,” said Avinash Gorakshakar, head of research at Mumbai-based Profitmart Securities.
Adani Power (ADAN.NS) and Adani Wilmar (ADAW.NS) and Adani Total Gas fell by 5% each (ADAG.NS) Down 10%, all three fell through their daily price limits. Adani Transmission (ADAI.NS) 3% and Adani Green Energy declined (DNA.NS) 5.6%.
Adani Total Gas is a joint venture with France’s Total (TTEF.PA)was the biggest victim of the short-seller report, losing about $27 billion.
After losing $86 billion in recent days, the combined market capitalization of the seven listed Adani Group entities is around $131 billion.
INSPECTION
Highlighting the nervousness in some quarters, Bloomberg reported that Credit Suisse reported on Wednesday (CSGN.S) had stopped accepting bonds of Adani group companies as collateral for margin loans to private banking clients.
Deven Choksey, managing director of KRChoksey Equities and Securities, said that was a big factor in the stock’s slide on Wednesday.
Credit Suisse had no immediate comment.
“Yesterday after the stock sell-off ended, there was a small bounce after it looked unlikely at one point, but now the weak market sentiment has resurfaced after the Hindenburg bomb report,” said Mumbai-based independent market analyst Ambareesh Baliga.
“Despite Adani’s denial, it clearly shows some damage to investor sentiment with the shares falling. It will take some time to stabilize,” Baliga added.
Shares of ACC cement firms (ACC.NS) and Ambuja Cements (ABUJ.NS)Adani Group bought it from Switzerland’s Holcim (HOLN.S) decreased by 6.2% and 16.7%, respectively, for $10.5 billion last year.
An Australian regulator said on Wednesday that scrutiny of the conglomerate was being stepped up. Consider Hindenburg’s claims to find out if further inquiries are needed.
The data also showed that foreign investors sold a net $1.5 billion 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 market regulator, which looks into deals by the conglomerate, add Hindenburg reports on his preliminary investigation.
State-run Life Insurance Corporation of India (LIC) (LIFI.NS)he said Adani’s management will be asked to clarify the short seller report on Monday. LIC held a 4.23% stake in Adani Enterprises and over 9% in Adani Ports and Special Economic Zone as of December-end. The insurance giant was also a major investor in Adani’s recent share sale.
Siddhartha Mohanty, one of LIC’s managing directors, said in interviews on Monday that the insurer was engaged with the Adani Group but was positive about its investments.
Hindenburg said in its report that the Adani Group is shorting US bonds and derivatives not traded in India.
Reporting by Chris Thomas and Aditya Kalra in Bengaluru and Aditi Shah in New Delhi; Additional reporting by Bharath Rajeshwaran; Edited by Edwina Gibbs and Mark Potter
Our standards: Thomson Reuters Trust Principles.
