Adani Group Building. , Photo credit: The Hindu
The combined value of 10 Adani group companies – including Adani Ports, Adani Green Energy and Power – fell below the $100 billion mark on February 21, weeks after US short-seller Hindenburg Research’s discovery report.
Overall, the Adani group has lost more than $135 billion in market capitalization since January 24, when Hindenburg alleged large-scale stock manipulation and fraud by the group. The group has repeatedly denied all allegations. The group has been struggling to reassure investors ever since; Shares of publicly listed companies have fallen drastically. On February 1, the group closed its Rs 20,000 crore follow-on public offer and decided to return the money collected from investors citing unsustainable conditions.
The stock market reflected similar uneasy sentiments on Tuesday: Four in 10 firms traded lower Bloomberg. The most significant decline was experienced by Adani Total Gas, which has lost nearly 77% of its equity value since January 24; It is followed by Adani Green Energy & Transmission. Adani Enterprises was down by 54% and Adani Power by 38%, respectively.
The fall in the company’s share prices has also dented billionaire Gautam Adani’s net worth, bringing it down to $49.10 billion. As of January 31, he was No longer in the top 10 richest people in the worldslipped from second to 25th on the list.
On 18 February, index provider FTSE Russell confirmed that it would go ahead with “scheduled index review changes for changes to Adani Group (India) and its associated securities”. This comes days after Morgan Stanley Capital International (MSCI) announced similar weighting changes for the four Adani stocks. MSCI later delayed the changes for two of them.
The Adani group is focusing on debt service and is focusing on repaying short term commercial papers instead of repaying them. Earlier this month, a spokesperson told reuters Adani Ports and Special Economic Zone plans to prepay ₹10 billion in maturing commercial papers. This came after paying ₹15 billion to SBI Mutual Fund and ₹5 billion to Aditya Birla Sun Life Mutual Fund, respectively.
The Supreme Court said it would set up an expert committee to examine the existing regulatory regime and framework in the securities market to ensure that investors’ interests are protected against share price slump, as in the case of the Adani Group. happened in the case of