Market value of Adani Group declines below $100 billion as per Reports
Gautam Adani and his businesses have reduced spending, paid off debt, hired lawyers in an effort to satisfy traders’ concerns about the group’s ability
On Tuesday, the combined equity market value of the ten companies that make up Adani Group fell under $100 billion as the troubled conglomerate struggled to reassure investors in the wake of a damning report by a US short seller.
Since Jan 24, when US-based Hindenburg Research published a report alleging accounting fraud and stock manipulation—accusations that Adani Group has repeatedly denied—the ports-to-power company has lost more than $136 billion in market capitalization.
Billionaire Gautam Adani and his businesses have reduced spending, paid off debt, hired legal and communication teams, and hired lawyers in an effort to satisfy traders’ concerns about the group’s ability to obtain financing. Although the campaign helped the conglomerate’s dollar bonds return from the brink of default, the ongoing equity selloff shows that more needs to be done.
Sameer Kalra, the founder of Mumbai-based Target Investing, stated that “capex and debt remain significant concerns.” These “can add to valuations’ burden.”
According to data compiled by Bloomberg, the group recently turned to global banks for at least as much in foreign-currency loans as it did to international bond buyers for more than $8 billion in bonds. The outlook for a few businesses, including Adani Green Energy Ltd. and Adani Ports & Special Economic Zone Ltd., has also been changed by rating agencies.
Adani and his businesses are now placing a higher priority on their financial health than on the recent aggressive debt-fueled expansion spree. As the group works to undo the harm brought on by Hindenburg’s report, its attention has turned to cash management, debt repayment, and reclaiming pledged shares.
As of 11:04 am in Mumbai, the group’s stocks were trading in a choppy manner. The company’s flagship, Adani Enterprises Ltd., was little changed. Adani Power Ltd. increased by a comparable amount, while Adani Green, Adani Transmission, and Adani Total Gas each saw a 5% limit decline. Adani Ports traded about 2% higher.
