Indian Adani Group’s Losses Exceed $100 Billion Within Days

The stock market value of India’s Adani Group has continued to fall significantly this week as the conglomerate’s controversial stock offering failed to appease investors, deepening a market rout that has now resulted in over $100 billion in stock value losses for the group with $30 billion lost in the past two days alone.

The pullout of Adani Enterprises’ share sale caps a dramatic setback for Gautam Adani, the Indian billionaire whose fortunes rose rapidly in recent years but have since crumbled after a critical research report was published by the US investment firm Hindenburg Research.

Adani is now 15th richest in the world, according to the Forbes real-time billionaires list, with a net worth of $74.7 billion. Last week, he was ranked 3rd.

The entire fiasco is an embarrassment for Adani, who has already in bed with foreign behemoths TotalEnergies (TTEF.PA) of France and investors such as Abu Dhabi’s International Holding Company as he pursues a global expansion of businesses ranging from ports and mining to cement and power.

Despite the fact that the offer was fully subscribed on Tuesday, Adani called off the share sale late Wednesday after a stock market selloff erased gains in minutes. According to Reuters, the group companies’ combined market value has dropped by nearly half. Adani Enterprises, described as Adani’s business incubator, has lost $24 billion in market capitalization since Hindenburg’s report was released on January 24,

Source: Reuters

Adani’s falling share price has raised concerns about the possibility of a devastating impact on India’s financial system. To help ascertain the full extent of exposure to other stocks, India’s central bank has requested information and started its own investigation into the matter. International media reported earlier that local banks were exposed to roughly 40 percent of Adani Group’s debt totaling 2 trillion Indian rupees ($24.53 billion) in the fiscal year ending March 2022.

Earlier this week, the Adani Group stated that it had complete investor support. While the stock’s market price was lower than the issue’s offer price after the publication of the Hindenburg report, Adani was able to secure share sale subscriptions on Tuesday.

However, stocks fell again on Wednesday. Later that night, Adani announced a withdrawal of the share sale as the company’s stock price had fluctuated massively. “Given these extraordinary circumstances, the company’s board felt that going ahead with the issue will not be morally correct,” said Gautam in a statement.

The anchor portion of the issue was bid for by Maybank Securities, Abu Dhabi Investment Authority, and India’s Life Insurance Corporation (LIFI.NS). Adani will now repay these investments.