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The allegations by Hindenburg Research have cost Gautam Adani a substantial part of his wealth, whereas the Adani fraud has wiped off $154 bn in market value from the Indian conglomerate up until February 27, 2023.
Founder Gautam Adani’s net worth has decreased by $80.6 bn in the past month to $39.9 bn now. The Indian tycoon, who began the year among the richest five individuals in the world, was ranked 30th as of February 26.
All in all, Adani stocks have lost 60% of their value in less than a month. Moreover, the asset management arm of JPMorgan Chase & Co. removed all investments in the Adani empire from its ESG portfolios.
Index provider MSCI also cut the free float designation of four listed firms from the Adani group. The MSCI review decision caused Adani Group shares to plummet as much as 20% on February 9.
“At present, for the Adani group, the alarm bells are tolling. The daily meltdown in share prices is testimony to a grim future. The rescinding of flagship Adani Enterprises’ Rs 200 bn Follow-on Public Offering (FPO) has deprived the group of critical long-term funds at a time when the flagship had a huge short-term liquidity gap,” said independent research analyst Hemindra Hazari who publishes on Smartkarma.
Recovery after Adani fraud allegations
Despite the grim scenario facing it, the ports-to-power company is making a new effort to win back investor trust. It is trying to do so by implementing several emergency measures, including cost-cutting and early debt repayment. These actions have failed to stop the value of its stocks from plummeting. However, they have managed to recover the conglomerate’s crucial dollar bonds from distressed levels.
According to data compiled by Bloomberg, at least 200 financial institutions worldwide, including the world’s largest asset manager BlackRock Inc, have exposure to the $8 bn in dollar bonds issued by Adani Group. As many as 15 dollar bonds of Adani have recovered from recent lows, but are still down between 5% and 18% from where they were before the Hindenburg allegations came to the fore, representing a total loss of nearly $800m.
In good news for the Adani group, global ratings agency S&P withdrew Adani Green Energy Ltd from under observation and maintained its rating of the company at ‘BB+’ on February 24.
Additionally, on February 17, Adani Total Gas, Adani Enterprises, Adani Wilmar, Adani Power, and ACC were added to 14 Nifty indices on the National Stock Exchange (NSE). However, this has raised concerns among financial experts who are now asking the NSE board and market regulators SEBI to review the decision.
To win back investor confidence, the Adani conglomerate kicked off a series of investor meetings as a part of its roadshow at a hotel in Singapore on February 27. The group’s finance head stated on the sidelines of the roadshow that the company is not looking to refinance the debt or inject money. The roadshow will continue in Hong Kong during the first week of March at Barclays Plc’s office.
