Gautam Adani Calls Out the Volatility in the Market as Temporary; Assures Investors After the Hindenburg Chaos

Gautam Adani, the Chairman of the Adani group has stated that the current volatility in the market is temporary. Presently, the Hindenburg chaos has caused the group to lose around 100 million USD market cap.

He mentioned in December’s reports that the Enterprise’s extreme resilience and the ability to build a profitable core business have shown the strength of the group to harness the diverse portfolio has been helping to create long-term value for the stakeholders. He has stated that the company’s success has been due to its governance, a strong generation of revenue, and sustained practices.

Gautam Adani trembles after the Hindenburg report; SEBI turns out a close eye, Moody’s analytics downgrades ratings, and what more:

Gautam Adani has experienced a sharp fall in his net worth that made his position slump from the third richest to the 24th richest man now.

The present market situation is temporary and will be an incubator for the long-term performance of the company. The Adani enterprises would continue to work with the objectives of moderate purchase and search for strategic opportunities to expand and grow.
The group has assured that the group is overcoming the massive crisis caused by the Hindenburg report.

Previously, the Group shared that directors had decided against moving forward with the FPO to protect investors’ interests. The shares are worth 20,000 crores INR.

In response, Gautam Adani said that the decisions were made because of the company’s trading experience with falling stock prices. He mentioned that the interests of the investors were crucial, so he decided to keep them from recovering losses.

The stock price saw a 10% decline. It resulted in a loss of 10.6 billion USD in market capitalization for the company.

Following the Hindenburg report on the Adani Group, Moody’s Investors Service lowered the platform status of the Adani Group from stable to negative. Adani Green Energy (AGELrating )’s outlook has changed from stable to negative, but the Ba3 ratings have not changed.

Adani Transmission Station One and Adani Electricity are included in the Adani Green energy-restricted group, and their outlook has been downgraded to negative.

The company’s capital expenditure plan and its high reliance on sponsor support, in the form of subordinated debts or shareholder loans, have caused the ratings to change. The performance of the Group is uncertain because of the result of the short-seller attack, according to Moody Analytics.

Adani Transmission’s downgrade from stable to negative reflects the group’s credit metrics about Moody’s minimum levels of tolerance. The verdict shows that the capacity of the group to withstand rising funding costs or declining funding characteristics is harmed.

Furthermore, his debt stands at 1 percent of the Indian economy. The outcomes have brought into account the severity of the financial issues amidst the wealthiest man in Asia’s accusations of accounting fraud.
Liabilities for the ten Adani groups listed on the stock exchange amount to 3.39 trillion rupees, or 41.1 billion USD.

The information was gathered using the QUICK FactSet. The businesses that increased the liability are ACC, Ambuja Cements, and New Delhi Television. Gautam Adani purchased the three companies mentioned above in 2022.

The nominal GDP of India reached 273 trillion rupees, according to reports from the International Monetary Fund. It implies that Adani’s debt accounts for 1.2 percent of the GDP of the Indian economy.

While the group’s ten publicly traded companies account for 4.8 trillion rupees of the assets owned by Adani. the investors have been leery of mounting excessive debt. Since there are so many privately held businesses in the group, the total amount of debt may be higher.

The Group has mentioned that the EBIDTA ratio of the group has decreased from 7.6 times to 3.2 times in the fiscal year 2023.

Furthermore, the chaos has resulted in many global banks accepting the Group’s bonds for collateral for debts. The SEBI is conducting a strict inspection of the matter. The RBI has shared its concerns and asked the banks for information about their exposures to the group.

The RBI has declared that it monitors every bank to ensure financial stability in its capacity as the supervisor and regulator. Additional factors, like adequacy of capital, asset quality, liquidity, coverage, and many others are considered when assessing the strength of the banking sector. In addition, the banking sector is flourishing right now.

edited and proofread by nikita sharma