Adani Group signage at the company’s gas station in Ahmedabad, India, on Wednesday, February 1, 2023.
Bloomberg | Bloomberg | Getty Images
Indian conglomerate Adani on Thursday deepened market losses that topped $100 billion, snowballing as scathing news of a short sale sent shockwaves through the market and led the company to pull out of a public stock offering.
Losses in Gautam Adani’s main businesses hit $107 billion at 10:00 a.m. London time on Thursday since the publication of a widely critical report by New York’s Hindenburg Research that revealed a short position in Adani Group companies on January 24.
Loss of market value for Adani companies
| Company name | Market Cap ($Bln Jan 24) | Market Cap ($Bn Feb 2) | Total loss ($ billion) | Total loss (%) |
|---|---|---|---|---|
| Adani Enterprises | 48.03 | 21.80 | 26.23 | 54,61 |
| Adani Green Energy | 37.09 | 20.07 | 17.03 | 45.90 |
| Adani Ports | 20.11 | 12.18 | 7.93 | 39.45 |
| Adani gearbox | 37.62 | 21.20 | 16.43 | 43.66 |
| Adani Total Gas | 52.29 | 22.97 | 29.32 | 56.07 |
| Adani Power | 12.97 | 9.51 | 3.46 | 26.64 |
| Adani Wilmar | 9.12 | 6.68 | 2.43 | 26,67 |
| Ambuja cements | 12.11 | 8.60 | 3.51 | 28.99 |
| acc | 5.37 | 4.25 | 1.11 | 20.76 |
| Final price | 107.45 |
Source: CNBC, FactSet, February 2 at 10:00 UTC
The report, which claims to be a two-year investigation, accused the conglomerate of engaging in “a brazen stock manipulation and accounting fraud scheme spanning decades.”
Adani flatly dismissed the allegations as “nothing but lies” from the “Madoffs of Manhattan” in a 413-page response that failed to calm jittery investor sentiment and stem the rapid sell-off.
“It is extremely troubling that the statements of an entity thousands of miles away, with no credibility or ethics, have caused a serious and unprecedented adverse impact on our investors,” Adani said in a response, describing Hindenburg as an “unethical short seller.”
“Hindenburg did not release this report for any altruistic reasons, but purely for selfish motives and in clear violation of applicable securities and exchange laws,” he said.
On January 29, Hindenburg responded that Adani’s comment “predictably tried to divert attention from the substantive issues and instead fueled a nationalist narrative, claiming that our report was a ‘calculated attack on India.’
Forbes has downgraded Gautam Adani from its list of the world’s 10 richest men.
A sharp fall in Adani Group companies raised concerns about broader systemic risk to Indian markets. India’s central bank has asked local banks for details of their exposure to conglomerate Adani, Reuters reported on Thursday, citing government and banking sources.
They cited “unprecedented” market conditions and sharp fluctuations in the daily share price Adani Enterprises will liquidate its $2.5 billion follow-on public offering (FPO) on Wednesday.
“Investors’ interest is paramount and therefore the board has decided not to proceed with the FPO to protect them from any potential financial losses,” Adani said in a statement.
The FPO sale achieved full underwriting.
—CNBC’s Ganesh Rao contributed to this article.
