Adani loses crown as Asia’s richest as share write-off hits $86 billion

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 (ADEL.NS)which some see as a seal of investor confidence during the crisis.

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 of Adani Enterprises, often described as an incubator for Adani ventures, fell 28% on Wednesday, bringing 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 (ADNA.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.

Dollar bonds issued by Adani institutions also continued to fall on Wednesday. Adani Ports’ U.S. dollar-denominated bonds, which mature in February 2031, fell 3.59 cents to 67.58 cents, leading to losses.

Emphasizing that there is nervousness in some circles, Bloomberg told Credit Suisse (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.

After losing $86 billion in recent days – equivalent to 16% of India’s $550 billion in annual budget spending disclosed on Wednesday – the seven listed Adani Group entities now have a combined market capitalization of about $131 billion.

TRUSTS ARE DAMAGED

“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.

Asked whether he was worried about broader losses in India’s equity markets due to the fall in Adani Group shares, Economic Affairs Secretary Ajay Seth said the government “does not comment on issues related to a particular company”.

India’s Nifty index fell 2.7% after the Hindenburg report. 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

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.

India’s market regulator will look into the deals by the conglomerate add Sources told Reuters that Hindenburg had submitted a report on its own preliminary investigation. The regulator did not comment on the Adani-Hindenburg saga.

Indian credit rating agency ICRA Ltd, a unit of Moody’s Investors Service, said on Wednesday that it is monitoring the impact of the developments on Adani Group’s rating portfolio. He added that while the group’s large debt-financed capital spending plan was a “major challenge”, some of it was discretionary and could be delayed depending on its liquidity position.

State-run Life Insurance Corporation of India (LIC) (LIFI.NS)he said On Monday, he will seek clarification from Adani’s management on the short seller report. 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.

Shares of ACC cement firms (ACC.NS) and Ambuja Cements (ABUJ.NS)Adani Group bought it from Switzerland’s Holcim (HOLN.S) last year it was 6.2% and 16.7% to 10.5 billion dollars.

Hindenburg said in its report that the Adani Group is shorting US bonds and non-trading derivatives in India.

Reporting by Chris Thomas and Aditya Kalra in Bengaluru and Aditi Shah in New Delhi; Additional reporting by Bharath Rajeshwaran, Nikunj Ohri, and Sethuraman NR; Edited by Edwina Gibbs and Mark Potter

Our standards: Thomson Reuters Trust Principles.