Saturday, September 30, 2023

The Adani group lost $108 billion in a week


Billionaire Gautam Adani is dealing with the worst crisis of his corporate career. Accused of stock manipulation and accounting fraud, the Adani Group has lost $108 billion in market value since Hindenburg Research’s January 24 report, according to Bloomberg.

Since the allegations were made, financial institutions ranging from New York to London and Tokyo have reduced their exposure to Adani, where they had not. 2 among the richest people in the world.

The Adani Group’s worst nightmare:
-> Since Hindenburg’s January 24 report, the Adani Group of companies has lost almost half of its total market capitalization. Adani Enterprises – described as an incubator for Adani Enterprises – lost $26 billion in market value.

-> Shares of Adani Enterprises fell 27% on Thursday to close at their lowest level since March 2022.

-> Other companies in the group also fell further, with Adani Total Gas posting a 10% loss.

-> Adani Green Energy and Adani Transmission, while Adani Ports and Special Economic Zone fell nearly 7%.

-> The turmoil has not only hit Adani Group shares hard but also banks that lend to businesses. The State Bank of India has fallen 11% since the Hindenburg report.

-> Foreign institutional investors withdrew $2 billion net from Indian equities from Jan. 27-31, according to data compiled by Bloomberg.

“Headlines related to Adani have generated a high level of negative attention, which may dampen investor interest in Indian stocks,” Bloomberg quoted Jian Shi Cortesi, fund manager at GAM Investments, based in Bloomberg. Zurich, which manages more than $80 billion in Indian stocks. assets, as mentioned earlier.

“While we don’t see Adani dragging down all Indian stocks, we believe it could cause India to underperform other Asian markets like China,” he added.

Bloomberg also reported that Citigroup’s wealth arm stopped accepting Adani-issued securities as collateral for margin lending after “negative news about the group’s financial condition” caused prices to fall. Credit Suisse’s private banking unit made similar adjustments for bonds.

Yoshiro Hamamoto, managing director of the Japan securities division of Mizuho Financial Group Ltd, told reporters in Tokyo on Thursday that the Japan securities division had already dealt with Adani and was investigating the allegations against the group. Mizuho Securities handled Adani’s bond offering, according to public filings. While Adani’s company has refuted the allegations and the billionaire himself said in a video address on Thursday that the canceled stock offering would have no impact on operations, the sale shows no signs of slowing down.

The opposition agrees to jointly raise the Adani issue Opposition parties agreed to jointly raise the issue of allegations of fraud against the Adani Group in parliament on Thursday, but have yet to agree on the terms of the Gujarat big business survey.

At a meeting of like-minded political parties convened by Congress President Mallikarjun Kharge, the two sides generally agreed to force the Adani issue in the House of Representatives and force the government to suspend talks on a motion aiming to thank the president for his speech on Monday.

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