BENGALURU, Feb 1 (Reuters) – Indian tycoon Gautam Adani lost his title as Asia’s richest man on Wednesday as his fortune sank to $84 billion after a report by a short seller in one of his biggest conglomerates.
A report by Hindenburg Research last week blamed the group’s improper use of offshore tax havens and manipulation of shares and concerns over high debt and valuations of seven listed Adani companies.
An Australian regulator said on Wednesday it had stepped up its scrutiny of the group to review the allegations to see if further investigations were needed.
The Adani Group has denied Hindenburg’s allegations, saying the short-seller’s narrative of stock manipulation has “no basis” and stems from ignorance of Indian law. It has always made necessary regulatory disclosures, it added.
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Share losses on Wednesday saw Gautam Adani slip to No. 10 on the Forbes rich list, with an estimated net worth of $84.1 billion, just below Reliance Industries Ltd chairman Mukesh Ambani. (RELI.NS) An estimated $84.4 billion. Before the Hindenburg report, Adani was ranked 3rd.
The worst setback comes despite the group managing to rally investors’ support to hold a share sale of flagship Adani Enterprises on Tuesday.
“After looking unlikely at one point, there was a slight bounce yesterday after the stock sell-off, but now after the bombshell Hindenburg report the weak market sentiment is back,” said Mumbai-based independent market analyst Ambarish Balika.
“With the shares falling even after Adani’s denial, it clearly shows some damage in investor sentiment. It will take some time to stabilize,” Balika added.
Adani Enterprises (ADEL.NS), often described as Adani’s portfolio of businesses, fell 20% on Wednesday, bringing its losses to nearly $15 billion after the Hindenburg report. Adani Power (ADAN.NS) Adani Total Gas fell 5% (ADAG.NS) It fell 10%, breaking its daily price range.
Adani Transmission (ADAI.NS) 6% and Adani Ports and Special Economic Zone decreased (APSE.NS) 15% decrease.
Adani Total Gas is a joint venture of French energy company Total (TTEF.PA) And Adani Group, which lost $27 billion, was the biggest hit on the short-seller report.
The data also showed that foreign investors sold a net $1.5 billion worth of Indian stocks after the Hindenburg report — the biggest outflow in four consecutive days since September 30.
Adani Group is expected to continue to have headaches for some time.
India’s market regulator, which is probing the group’s deals, has also said it will. Collaboration Hindenburg’s report to its own initial inquiry.
Government run Life Insurance Corporation (LIC) (LIFI.NS) on Monday said Clarification will be sought from Adani’s management on the short seller report. However, insurer Adani Enterprises was the main investor in the share sale.
Hindenburg said in its report that Adani Group has shorted US-bonds and non-India trading derivatives.
Reporting by Chris Thomas in Bangalore and Aditi Shah in New Delhi; Additional reporting by Bharat Rajeshwaran and Aditya Kalra; Editing by Edwina Gibbs
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