Hindenburg Research questioned the Indian conglomerate\u2019s debt levels and use of tax havens
\n NEW DELHI
\nShares of Adani Group companies extended declines in Mumbai on Friday, with their market value now more than halved to less than $100 billion after a critical report by a U.S. short-seller last week sparked a market rout.
\nHindenburg Research questioned the Indian conglomerate\u2019s debt levels and use of tax havens. Adani called the report baseless and said its financials remain strong, yet the ensuing stock market crisis has sparked broader concerns of possible systemic impact.
\nLawmakers have called for a wider probe into the matter, and sources have told Reuters that the central bank has asked lenders for details of their exposure to the group.
\nIn one of the biggest setbacks for Chairman Gautam Adani, the group shelved its $2.5 billion share sale on Wednesday which would otherwise have taken place at the height of the rout.
\nIn Friday trade, the share price of Adani Enterprises Ltd (ADEL.NS) – the group\u2019s flagship company – nosedived 35% to its lowest level since March 2021. That took losses to nearly $33.6 billion since last week representing a 70% decline.
\nAdani Ports and Special Economic Zone Ltd (APSE.NS) was down 14%, while Adani Transmission Ltd (ADAI.NS) and Adani Green Energy Ltd (ADNA.NS) slumped 10% each. Adani Total Gas Ltd (ADAG.NS) – a joint venture with France\u2019s TotalEnergies SE (TTEF.PA) – fell 5%.
\n\u201cContagion concerns are widening, but still limited to the banking sector. Focus remains on further risks of index exclusions,\u201d said Charu Chanana from Saxo Markets in Singapore.
\nOn Thursday, S&P Dow Jones Indices said it would remove flagship firm Adani Enterprises Ltd (ADEL.NS) from widely used sustainability indices on Feb. 7, making the shares less appealing to environment-conscious investors.
\n\u201cOne of the big risk factors to watch for now is if more indices remove Adani stocks,\u201d said Chanana. \u201cThis can result in foreign outflows as funds sell Adani stocks, further aggravating confidence issues.\u201d
\nHindenburg in its report said key listed Adani companies had \u201csubstantial debt\u201d and that shares in seven Adani listed firms have an 85% downside due to what it called sky-high valuations. It also alleged stock manipulation.
\nThe Adani Group said the allegation of stock manipulation had \u201cno basis\u201d and stemmed from ignorance of Indian law. Its response stated that over the past decade, group companies have \u201cconsistently de-levered\u201d.
\nIn total, the seven listed Adani Group companies now have a market capitalisation of $99 billion, versus $218 billion before the Hindenberg report.
\nThe meltdown in share prices marks a dramatic turn of fortune for Adani, who in recent years forged partnerships with, and attracted investment from, foreign giants as he pursues global expansion in sectors as varied as ports and power.
\nAdani is also no longer Asia\u2019s richest person, and has slid to 17th in Forbes\u2019 rankings of the world\u2019s wealthiest people. The 60-year-old had been third behind Elon Musk and Bernard Arnault. Indian rival Mukesh Ambani of Reliance Industries Ltd (RELI.NS) is now Asia\u2019s richest person.
\nThe prices of U.S. dollar bonds issued by Adani Group entities edged higher on Friday after diving on Thursday.
\nAdani Green\u2019s bonds maturing in September 2024 gained about 7 cents to 69.69 cents, having fallen to record low of 60.56 cents on Thursday.<\/p>\n","protected":false},"excerpt":{"rendered":"
Hindenburg Research questioned the Indian conglomerate\u2019s debt levels and use of tax havens NEW DELHI Shares of Adani Group companies extended declines in Mumbai on Friday, with their market value now more than halved to less than $100 billion after a critical report by a U.S. short-seller last week sparked a market rout. Hindenburg Research […]<\/p>\n","protected":false},"author":2,"featured_media":311620,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-311612","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n