Adani Group Building. | Photo credit: The Hindu
The combined value of Adani Group’s 10 companies – including Adani Ports, Adani Green Energy and Power – fell below the $100 billion mark on February 21, weeks after a surprise report by US short seller Hindenburg Research.
In total, Adani Group has lost more than $135 billion in market capitalization since January 24, when Hindenburg alleged massive stock manipulation and fraud by the company. The group has repeatedly denied all allegations. The group has since struggled to reassure investors. There has been a tremendous boom in the stocks of publicly listed companies. Group on February 1st Canceled its ₹ 20,000 crore follow-on public offering. and decided to return the money raised from investors citing unstable conditions.
The stock market on Tuesday reflected a similarly nervous sentiment: Four out of 10 firms lost business, according to Bloomberg. The most significant decline was experienced by Adani Total Gas, which lost nearly 77% of its equity value since January 24. Next is Adani Green Energy & Transmission. Adani Enterprises was down 54 percent and Adani Power was down 38 percent, respectively.
The fall in the company’s share prices has also hurt billionaire Gautam Adani’s net worth, which has dropped to $49.10 billion. As of January 31, he was. No longer among the 10 richest people in the world.It further slipped from 2nd to 25th place in the list.
On February 18, index provider FTSE Russell confirmed that it will go ahead with “revised index revisions for changes to Adani Group (India) and associated securities”. This comes days after Morgan Stanley Capital International (MSCI) announced similar weighting changes for four Adani stocks. MSCI later delayed two of these changes.
The Adani Group is focusing on debt servicing and paying down short-term commercial paper borrowings rather than repaying them. Earlier this month, a spokesman said Reuters Adani Ports and Special Economic Zone plan to make an upfront payment of ₹ 10 billion in completion of commercial papers. This came after paying ₹ 15 billion to SBI Mutual Fund and ₹ 5 billion to Aditya Birla Sun Life Mutual Fund respectively.
The Supreme Court said it will constitute an expert committee to review the existing regulatory regime and framework in the securities market to ensure that investors’ interests are protected against decline in share value, as Adani Group was the case.