BENGALURU, Feb 1: India’s Gautam Adani lost his title of Asia’s richest person on Wednesday as a rout in his conglomerate’s stocks deepened to $74 billion after a short-seller report.
A report by Hindenburg Research last week alleged improper use of offshore tax havens while flagging concerns about high debt and the valuations of seven listed Adani companies.
It has brought heightened scrutiny of the conglomerate with an Australian regulator saying on Wednesday that it would be reviewing the allegations to see if further enquiries are warranted.
The Adani Group has denied the allegations, calling them baseless and saying it has always made necessary regulatory disclosures.
Wednesday’s stock losses saw Gautam Adani slip to 10th on Forbes rich list with an estimated $84.1 billion, just below rival Mukesh Ambani, the chairman of Reliance Industries Ltd (RELI.NS) who has an estimated $84.4 billion. Before the Hindenburg report, Adani had ranked 3rd.
The worsening rout comes despite the group managing to muster support from investors to haul a share sale for flagship firm Adani Enterprises Ltd (ADEL.NS) over the line on Tuesday.
“There was a slight bounce yesterday after the share sale went through, after seeming improbable at a point, but now the weak market sentiment has become visible again after the bombshell Hindenburg report,” said Ambareesh Baliga, a Mumbai-based independent market analyst.
“With the stocks down despite Adani’s rebuttal, it clearly shows some damage to investor sentiment. It will take a while to stabilise,” Baliga added.
Adani Enterprises (ADEL.NS) lost 5% on Wednesday to bring its losses since the Hindenburg report to more than $8 billion. Adani Power (ADAN.NS) fell 5%, while Adani Total Gas (ADAG.NS) slumped 10%, down by its daily price limit.
Adani Total Gas, a joint venture between France’s energy major Total (TTEF.PA) and Adani Group, has been the biggest casualty of the short seller report, losing about $27 billion.
Data also showed that foreign investors sold a net $1.5 billion worth of Indian equities since the Hindenburg report – the biggest outflow over four consecutive days since Sept. 30.
Hindenburg said in its report it had shorted U.S.-bonds and non-India traded derivatives of the Adani Group.