Shares in listed companies linked to India’s sprawling Adani Group plunged $7.7 billion after short-selling firm Hindenburg Research issued a report targeting the conglomerate controlled by billionaire businessman Gautam Adani.
Shares in seven companies included in the Adani Group fell about 4 percent on average in late morning trading in Mumbai, with shares in flagship business Adani Enterprises down 3.7 percent. These declines brought the total loss in market value of Adani Group shares to around 625 billion rupees ($7.7 billion).
Adani’s business is expanding rapidly. The self-made billionaire started out as a commodities trader in the 1980s before eventually building India’s largest private infrastructure group with around a dozen ports and eight airports. The group has several subsidiaries covering sectors including data and defence.
The report comes as Adani, who has a net worth of about $118 billion as the richest person in Asia, according to Bloomberg, rushes to raise money to fuel the rapid expansion of his existing industrial equipment and fossil fuel as well as green energy business.
Jugeshinder Singh, chief financial officer of the Adani Group, said the group was “shocked” by the Hindenburg report, describing it as “a virulent mixture of selective misinformation and meaningless and unfounded allegations”.
Singh said the timing of the report, days before a follow-up share offer by Adani Enterprises, was intended to “undermine the reputation of the Adani Group” and hurt demand for the upcoming offering. He added that the group “has always been committed to all laws.”
The Hindenburg report, published Wednesday morning before the market opened in Mumbai, asserts that “even if you ignore the results of our investigation . . .[Adani Group’s]Major listed companies have an 85 percent downside on a purely fundamental basis due to very high valuations.”
Hindenburg said she took a short stance on the issue Adani group companies “through US-traded bonds and non-India derivatives”.
The billionaire businessman confirmed that the valuations of his companies are justified.
Adani announced plans last year to more The volume of freely traded shares in Adani Enterprises after the company’s share price rose more than 3,300 percent in three years. Public bidding for a share offer by Adani Enterprises is expected to begin on Friday with the aim of raising up to 200 billion rupees.
The stakes of several Mauritius-based investment funds that have for years held stakes in Adani companies and other companies included in the Adani Group have come to an end. Under the microscope From the Indian regulators in the past.
Analysts have raised concerns about the debt-driven growth of the Adani Group, noting that the group’s total debt of about 2 trillion rupees (about $24 billion) is equivalent to nearly seven times pre-adjusted earnings.
In December, the billionaire businessman told the Financial Times that some analysts “didn’t understand [his businesses] in real terms”.
“Those who understand are my lenders, banks, and global investors. Every time Adani comes to the market, they love to invest. That’s how we’re constantly growing,” he said.
The Adani Group, which derives much of its revenue from mining and burning coal, has pledged to become one of the world’s largest green energy companies by investing $70 billion by 2030 in everything from green hydrogen to manufacturing solar panels.
Launched by Adani a Obsession Indian broadcaster NDTV last year, trying to build a media company.
Additional reporting by Benjamin Parkin, South Asia Correspondent
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