India : Shares of India’s Adani Enterprises sank nearly 20 per cent on Friday as a scathing report by a US short seller triggered a rout in the conglomerate’s listed companies, casting doubts on how investors will respond to the company’s record $2.45 billion secondary sale.
Seven listed companies of the Adani conglomerate — controlled by one of the world’s richest men Gautam Adani — have lost a combined $48 billion in market capitalisation since Wednesday, with US bonds of Adani companies also falling after Hindenburg Research flagged concerns in a January 24 report about debt levels and the use of tax havens.
The rout took shares of Adani Enterprises, the group’s flagship company, well below the offer price of its secondary sale, which had initially been offered at a discount.
India’s capital markets regulator is studying the Hindenburg report and may use it to aid its own continuing probe into offshore fund holdings of Adani Group, two sources said.
Adani Group has dismissed the Hindenburg report as baseless and said it is considering whether to take legal action against the New York-based firm. It did not immediately respond to a request for comment on the regulator’s move.
With a net worth of $97.6 billion, billionaire Gautam Adani is now the world’s seventh richest man, according to Forbes, slipping from the third position he held before the Hindenburg report.
Mr Adani met the county’s power minister RK Singh on Friday in New Delhi, according to a source familiar with the matter. The agenda of the meeting was not immediately known.
The stunning market sell-off has cast a shadow over Adani Enterprises’ secondary share sale that started on Friday.
“The sell-off is seriously extreme … it has clearly dented the overall investor sentiment in the market,” said Saurabh Jain, assistant vice-president of research at SMC Global Securities.
