BENGALURU (Reuters) – Indian tycoon Gautam Adani lost his title as Asia’s richest man on Wednesday, as the rout of the biggest companies in his conglomerate deepened to $84 billion in the wake of a short sale report.
A report by Hindenburg Research last week alleged improper use by the group of offshore tax havens and equity manipulation, as well as concerns about high debt and the valuation of seven Adani listed companies.
Oversight of the conglomerate has tightened as an Australian regulator said on Wednesday it would review the allegations to see if further inquiries were warranted.
The Adani Group denied Hindenburg’s claims, saying the short sellers’ account of stock manipulation was “baseless” and stemmed from ignorance of Indian law. It added that it had always made the necessary regulatory disclosures.
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Wednesday’s stock losses pushed Gautam Adani down to 10th on Forbes’ list of the richest people with an estimated net worth of $84.1 billion, just below rival Mukesh Ambani, chairman of Reliance Industries Ltd. (RELI.NS) Which is estimated at 84.4 billion dollars. Prior to the Hindenburg Report, Adani was ranked third.
The worsening trajectory comes even though the group managed to rally support from investors to pull a share sale of leading company Adani Enterprises through the line on Tuesday.
“There was a slight bounce yesterday after the stock sell-off was completed, after looking unlikely at one point, but the weak market sentiment is now visible again after the explosive Hindenburg report,” said Ambaresh Palega, an independent market analyst in Mumbai.
“With stocks falling despite Adani’s rebuttal, it clearly shows some damage to investor sentiment. It will take some time to settle,” Palega added.
Adani projects (ADEL.NS)Adani Inc., often described as the incubator of Adani’s business, fell 20% on Wednesday, bringing its losses since the Hindenburg report to nearly $15 billion. Adani Power (ADAN.NS) Adani Total Gas fell 5 percent (ADAG.NS) It fell 10%, falling below the daily price limit.
Bring me back the transmission (ADAI.NS) And fell by 6% and the ports of Adani and the Special Economic Zone (APSE.NS) decreased by 15%.
Adani Total Gas, a joint venture of the French energy major Total (TTEF.PA) And the Adani Group, was the biggest victim of the short seller report, losing about $27 billion.
The data also showed that foreign investors sold $1.5 billion worth of Indian stocks since the Hindenburg report – the largest outflow in four consecutive days since Sept. 30.
The Adani group’s headaches are expected to continue for some time.
The Indian Markets Regulatory Authority, which was looking at conglomerate deals, said it would Add The Hindenburg Report to its own preliminary inquiry.
State run life insurance corporation (LIC) (LIFI.NS) on Monday He said You will seek clarifications from Adani management regarding the short seller report. However, the insurance giant was a major investor in the sale of Adani Enterprises shares.
Hindenburg said in its report that it downgraded US bonds and derivatives traded outside India for Adani Group.
Additional reporting by Chris Thomas in Bengaluru and Aditi Shah in New Delhi; Additional reporting by Bharat Rajeshwaran and Aditya Kalra; Editing by Edwina Gibbs
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