Adani shares fall faster than a stone and lost 100 billion amid investor flight
2023.02.02 03:17
Adani shares fall faster than a stone and lost 100 billion amid investor flight
By Kristina Sobol
Budrigannews.com – After the Gautam Adani-led conglomerate shelved a $2.5 billion share sale in a turbulent market on Thursday, India’s Adani group shares plunged, bringing its total market capitalisation losses to $100 billion since the short-seller attack last week.
A significant setback for Adani, the school dropout-turned-billionaire whose fortunes have risen rapidly in line with the stock values of his businesses, is the withdrawal of Adani Enterprises’ share sale.
Despite the offer being fully subscribed on Tuesday, Adani called off the share sale on Wednesday as a stocks rout sparked by Hindenburg’s criticisms by U.S. short-sellers deepened. Adani has also lost his title as Asia’s richest man as a result of the attack by the short seller.
Adani Enterprises, the flagship company of the group, lost 10% after opening higher on Thursday. Adani Power and Adani Wilmar each lost 5%, while Adani Ports and Special Economic Zone, Adani Total Gas, Adani Green Energy, and Adani Transmission each lost 10%.
An embarrassing turn of events for the billionaire, who has forged partnerships with foreign players in his global expansion of businesses that include ports, mining, and cement, marks the collapse of stocks and the postponement of the share sale.
According to Forbes’ list, Adani is now the 16th richest person in the world, down from third last week.
On Thursday by government and banking sources that the central bank of India has inquired about the specifics of the exposure of local banks to the Adani group of companies. In the fiscal year ending March 2022, CLSA estimates that Indian banks were exposed to approximately 40% of the 2 trillion rupees ($24.53 billion) worth of Adani group debt.
The Adani group stated earlier this week that investors had their full support, but investor confidence has decreased in recent days.
(NYSE:) Citigroup A person who has direct knowledge of the situation stated on Thursday that the wealth unit has stopped providing its clients with margin loans in exchange for Adani group securities. Citi withdrew their comment.
The Adani group was accused of stock manipulation and improper use of offshore tax havens in Hindenburg’s report last week. It also raised concerns regarding the valuations of seven listed Adani businesses and the high debt.
The short-seller’s claim of stock manipulation has “no basis” and is based on ignorance of Indian law, according to the Adani group. It added that the group has always disclosed all relevant regulatory information.
Adani was able to secure the share sale subscriptions on Tuesday despite the stock’s market price being lower than the issue’s offer price, despite the fact that shares fell following the Hindenburg report. However, stocks plunged once more on Wednesday.
Adani said that he was canceling the share sale because the company’s “stock price has fluctuated over the course of the day” in a late-night announcement on Wednesday. The board of directors of the company was of the opinion that proceeding with the issue would be immoral in light of these extraordinary circumstances.”
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