Gautam Adani Group’s market losses have surpassed $100 billion as stocks plummet following a failed share offering.

The stock price of the Gautam Adani-led company fell on Thursday after it postponed a $2 payment. In the middle of a tumultuous market, the company sold $5 billion worth of shares, bringing its market value losses since the assault of short sellers last week to $100 billion.

The Millionaire Ex-Student, whose fortune has lately soared along with the stock values of his enterprises, has been dealt a serious blow by Adani Enterprises’ decision to stop the share sale.

Adani cancelled the share offering on Tuesday despite it being fully subscribed.on Wednesday as a price fall prompted by US short-seller Hindenburg’s objections escalated. Due to the short-onslaught, Adani has also lost his title as Asia’s richest man. Adani Enterprises, the group’s dominant company, fell 10% following Thursday’s stronger opening. Adani Power and Adani Wilmar both had declines of 5%, while Adani Ports and Special Economic Zone, Adani Total Gas, Adani Green Energy, and Adani Transmission all experienced declines of 10%.  

An embarrassing turn of events for the millionaire who collaborated with international parties to expand Ports, mining, and cement are only a few of the industries that are impacted by the stock market collapse and postponement of the share sale.  Adani dropped from third place the week before to sixteenth place on Forbes’ list of the world’s wealthiest people.

Details on how much exposure local banks have to the Adani group of firms. According to CLSA, Indian banks were exposed to over 40% of the 2 trillion rupees ($24 billion) in the fiscal year that ended in March 2022. There are 53 billion rupees worth of debt owed by the Adani group. Since the Adani group asserted earlier this week that it had the support of all investors, investor confidence has declined.

On Thursday, a person with direct knowledge of the issue said that Citigroup’s wealth business has stopped providing its clients with margin loans backed by the Adani Group’s assets. Citi decided not to comment.  The Adani group was accused of stock manipulation and improperly using offshore tax havens in Hindenburg’s probe from last week. Other concerns mentioned were the level of debt and the worth of the seven listed Adani companies.

The Adani group has denied the accusations, asserting that the assertion of stock manipulation was made. Additionally, the group said that it had consistently made the necessary regulatory disclosures.  Despite the fact that on Tuesday, when shares declined, the stock’s market price was below the issue’s offer price following the release of the Hindenburg report, Adani was nevertheless able to obtain the subscriptions for the share sale.  

Late on Wednesday, Adani announced that he was postponing the company’s anticipated share sale. “The share price has varied during the day. Due to these particular circumstances, the company’s board opted against resolving the issue since it would not be morally appropriate.

Adani is no longer the richest person in Asia as the stock market continues to fall.

The shares of Indian tycoon Gautam Adani’s group continued to decline on Wednesday in reaction to a US short-seller claim, and the billionaire lost his title as Asia’s richest person. With an expected internet really well worth of $83.7 billion, Mukesh Ambani came in ninth on Forbes’ wealthy list. Adani plummeted to position 15 with an estimated net worth of $75.1 billion, behind his rival, as a result of Wednesday’s stock slump. Prior to the devastating study by US short-seller Hindenburg, Adani had been ranked third.

The losses are a serious setback for Adani, a billionaire who entered the business after quitting school, as his fortune and the stock prices of his businesses, which include ports, airports, mining, cement, and energy, have both grown rapidly in recent years.  The corporate tycoon is presently fighting to preserve his reputation and stabilise his companies. The stock declines occurred just one day after the Adani Group was successful in obtaining investor support for a $2.5 billion share sale for flagship business Adani Enterprises, which some saw as a sign of investor confidence amid a trying time.

The organisation engaged in stock manipulation and illegally exploited offshore tax havens, according to research published by Hindenburg Research last week. The organisation has denied the allegations, asserting that the short sellers’ stock manipulation tale has “no truth” and is the consequence of their ignorance of Indian law.  It claimed to have consistently made the necessary regulatory disclosures.

The shares of Adani Enterprises dropped 28% on Wednesday, tripling the company’s losses since the release of the Hindenburg report to almost $18 billion. The term “incubator of Adani businesses” has been used occasionally to describe Adani Enterprises. Adani Ports and Special Economic Zone had a drop of 19 percent. For both stocks, it was the worst day ever. Adani Power, Adani Wilmar, and Adani Total Gas all had decreases that were more than their daily price limitations, falling by 5%, 10%, and 11%, respectively. The decreases for Adani Transmission and Adani Green Energy were 3 and 5.6%, respectively.

Adani Total Gas, a joint venture between the French company Total and the Indian company Adani, lost roughly $27 billion as a result of the short-seller report. Dollar bonds issued by Adani companies began to lose value once more on Wednesday. The most-lost securities were the February 2031 due US dollar-denominated notes of Adani Ports, which fell 3.59 cents to 67.58 cents. According to the source, Credit Suisse no longer accepts bonds from companies owned by the Adani group as collateral for margin loans to its private banking clients, highlighting the discomfort in some circles.

According to Deven Choksey, managing director of KR Choksey Shares & Securities, this was a significant contributing factor in the severe falls on Wednesday. After losing $86 billion in the most recent days, the seven listed Adani Group companies now have a combined market valuation of about $131 billion. This is equal to 16% of India’s annual budget spending of $550 billion, which was disclosed on Wednesday.

Ambareesh Baliga, a freelance market analyst based in Mumbai, claims “Yesterday, when the share transaction was completed after initially seeming improbable, there was a little surge.  However, following the shocking Hindenburg report, the gloomy market sentiment has once more been apparent. Despite Adani’s denial, it is clear that investor confidence has been damaged because stocks are down. According to Baliga, it will take some time for things to stabilize.

When asked if he was concerned about potential losses on India’s stock markets as a result of the decrease in Adani Group shares, Economic Affairs Secretary Ajay Seth responded that the government “does not comment on concerns relating to a specific corporation.  India’s top Nifty index has dropped by 2.7% since the publication of the Hindenburg report. Data also shows that the highest four-day outflow since September 30 occurred following the publishing of the Hindenburg report, when foreign investors sold Indian shares for a net $1.5 billion.

On Wednesday, an Australian regulatory body declared that it will examine the allegations made by Hindenburg to see whether more investigations were required. This occurs as the firm is the subject of increased scrutiny. Reuters was informed by sources that the Indian markets regulator will incorporate Hindenburg’s findings into its own first investigation of the group’s acquisitions. The regulator has not addressed the Adani-Hindenburg dispute.

ICRA Ltd., a subsidiary of Moody’s Investors Service, stated on Wednesday that it was monitoring the implications of the developments on the rated portfolio of the Adani Group. It was observed that while the group’s significant debt-funded capital investment plan was a “key challenge,” part of it was discretionary in nature and might be postponed depending on the financial condition.

The government-run Life Insurance Corporation of India (LIC) announced on Monday that it will inquire about the short-seller allegation with Adani’s management. At the end of December, LIC owned more than 9% of Adani Ports and Special Economic Zone and 4.23 percent of Adani Enterprises. A prominent investor in Adani’s most recent share sale was the insurance behemoth.

After being purchased by Adani Group from Holcim of Switzerland for $10.5 billion last year, the cement businesses ACC and Ambuja Cements suffered a decline in their shares of 6.2 percent and 16.7 percent, respectively. In its report, Hindenburg said that it had shorted the US bonds and derivatives of the Adani Group that were transacted outside of India.

Edited by Prakriti Arora