On Thursday, the Adani Group’s market losses surpassed $100 billion, raising concerns about a potential systemic impact a day after the conglomerate’s flagship firm canceled its $2.5 billion (Rs 20,000 crore) stock offering.
On Thursday, S&P Dow Jones Indices announced that Adani Enterprises would be removed from widely used sustainability indices, effective Feb. 7, making the shares less appealing to sustainability-minded funds.
Furthermore, the National Stock Exchange announced that it has placed additional surveillance shares of Adani Enterprises, Adani Ports, and Ambuja Cements on the market.
However, Adani Group Chairman Gautam Adani is in talks with lenders to prepay and release pledged shares in order to restore confidence in his conglomerate’s financial health, according to Bloomberg News on Thursday.
The abrupt cancellation of Adani Enterprises’ share sale comes just a week after a critical research report by US-based short-seller Hindenburg Research.
The cancellation of the share sale sent shockwaves through markets, politics, and business. Adani shares fell, opposition lawmakers demanded a wider investigation, and the Reserve Bank of India (RBI) acted quickly to investigate banks’ exposure to the group. In the meantime, Citigroup’s wealth management division has stopped making margin loans to clients against Adani Group securities.
The crisis represents a dramatic turn of fortune for Adani, who has recently formed alliances with foreign behemoths such as France’s TotalEnergies and attracted investors such as Abu Dhabi’s International Holding Company as he pursues a global expansion spanning ports to the power sector.
Adani called off the share sale late Wednesday, despite the fact that it had been fully subscribed the day before, as a stock market rout sparked by Hindenburg’s criticisms intensified.
The crisis represents a dramatic turn of fortune for Adani, who has recently formed alliances with foreign behemoths such as France’s TotalEnergies and attracted investors such as Abu Dhabi’s International Holding Company as he pursues a global expansion spanning ports to the power sector.
Adani called off the share sale late Wednesday, despite the fact that it had been fully subscribed the day before, as a stock market rout sparked by Hindenburg’s criticisms intensified.
“Adani may have triggered a confidence crisis in Indian stocks, which could have broader market implications,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
Adani Enterprises’ stock fell 27% on Thursday, reaching its lowest level since March 2022.
Other group companies also lost ground, with 10% losses at Adani Total Gas, Adani Green Energy, and Adani Transmission, and nearly 7% at Adani Ports and Special Economic Zone.
Since Hindenburg’s report on January 24, the group companies’ combined market value has dropped by nearly half. Adani Enterprises, described as Adani’s business incubator, has lost $26 billion in market capitalization.
Adani is also no longer Asia’s richest person, having dropped to 16th in Forbes’ list of the world’s wealthiest people in a week, with his net worth nearly halving to $64.6 billion.
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Also Read: https://saidlist.com/adani-claims-hindenburg-report-was-a-calculated-attack-on-india/
