India’s Adani Group Losses Cross $100-Billion

BUSINESS

Dalal Street saw yet another disastrous day for Adani Group shares, with a total market loss of over $100 billion since last week. Not only has the massive decline had an effect on the wealth of billionaire Gautam Adani, but it has also raised concerns regarding a larger potential systemic impact on the domestic stock markets.

Following the cancellation of the group’s Rs 20,000 crore follow-on public offering (FPO), Adani Enterprises, the group’s flagship company, experienced sharp declines for a second consecutive day. Investors were taken aback by Adani Enterprises FPO’s withdrawal, and even the billionaire owner of the conglomerate, Gautam Adani’s video statement failed to please existing shareholders.

According to a report released by the US short seller Hindenburg Research and accused the conglomerate of stock manipulation, improper use of tax havens, and even money laundering is the reason for the massive drop in stock prices of Adani Group companies.

Hindenburg also expressed concern regarding the expanding debt of the conglomerate when it made the disclosure that it had taken short positions in Adani Group stock. Hindenburg’s report appears to be the actual trigger, whereas Adani Group cited market volatility as the reason for aborting its flagship company’s FPO.

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Despite Adani Group’s dismissal of the US short seller’s report and publication of a 413-page response, the conglomerate’s listed companies’ stock prices continue to fall.

Things have gotten worse since the secondary share sale was canceled, as the majority of Adani Group stocks fell on Thursday. Adani Enterprises suffered the most, sinking 26.70% to its lowest point since March 2022.

According to the report, the RBI has requested information from banks regarding their exposure to the conglomerate owned by Gautam Adani. In addition to the issues outlined in the Hindenburg report, a previous report indicated that the Securities and Exchange Board of India (Sebi) had begun investigating the recent decline in Adani Group stock prices.