BENGALURU, Feb 1 (Portal) – India’s Gautam Adani lost his title as Asia’s richest person on Wednesday as shares in his conglomerate rose to $74 billion after a short seller report.
A Hindenburg Research report last week alleged abuse of offshore tax havens and raised concerns about the high debt levels and valuations of seven Adani listed companies.
It has launched an intensified scrutiny of the conglomerate, with an Australian regulator saying on Wednesday it will review the allegations to see if further investigations are warranted.
The Adani Group has denied the allegations, calling them unfounded and saying it has always made the necessary regulatory disclosures.
Wednesday’s stocks drop saw Gautam Adani slip to 10th on the Forbes rich list with an estimated $84.1 billion, just behind rival Reliance Industries Ltd (RELI.NS) chairman Mukesh Ambani, who is estimated to be 84th $.4 billion. Before the Hindenburg Report, Adani had ranked 3rd.
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The worsening defeat comes as the group managed to rally support from investors to finalize a share sale for flagship company Adani Enterprises Ltd (ADEL.NS) on Tuesday.
“Yesterday there was a slight bounce after the stock sale was implemented after it seemed unlikely at one point, but now the soft market sentiment following the bombastic Hindenburg report has resurfaced,” said Ambareesh Baliga, a Mumbai-based independent market analyst.
“The fact that stocks have fallen despite Adani’s refutation clearly shows some damage to investor sentiment. It will take a while to stabilize,” Baliga added.
Adani Enterprises (ADEL.NS) shed 5% on Wednesday, taking its losses to more than $8 billion since the Hindenburg report. Adani Power (ADAN.NS) is down 5%, while Adani Total Gas (ADAG.NS) is down 10%, falling around its daily price limit.
Adani Total Gas, a joint venture between French energy giant Total (TTEF.PA) and Adani Group, was the biggest victim of the short seller report, losing around $27 billion.
The data also showed that foreign investors have sold Indian stocks worth a net $1.5 billion since the Hindenburg report — the largest outflow in four consecutive days since Sept. 30.
Hindenburg said in its report it had shorted US bonds and non-India-traded Adani Group derivatives.
Reporting by Chris Thomas in Bengaluru; Additional reporting by Bharath Rajeshwaran and Aditya Kalra; Editing by Edwina Gibbs
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