Seven Adani stocks lose about $100 billion in m-cap in six days
2 min read . Updated: 02 Feb 2023, 03:34 PM IST
Premium- The group company stock, Adani Enterprises fell ₹561.75, or 26.39%, to ₹1,566.95 on February 2
Since January 24, the market-cap of seven listed Adani Group companies has fallen nearly $100 billion. The group shares have been in a free fall with some bouts of recovery since the Hindenburg Research report came to light late last month.
Adani group pulled out its fully subscribed FPO on February evening. Post the announcement, the company's bonds fell to distressed levels. Bonds issued by Adani Green Energy and Adani Ports & Special Economic Zone (APSEZ) received maximum beating in the global markets.
On February 2 itself, the group company stock, Adani Enterprises fell ₹561, or 26.39%, to ₹1,566.95 on BSE. Adani Ports was down ₹30.15, or 6.13%, at ₹462; Adani Power was down ₹10.60,or 4.98%, at ₹202.15; Adani Transmission fell ₹173, or 10%, to ₹1,557.25; Adani Green Energy fell ₹115.30, or 10%, to ₹1,038.05; Adani Total Gas was down ₹190.15, or 10%, at ₹1,711.50; Adani Wilmar fell ₹22.15, or 4.99%, to ₹421.45.
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“While the overvaluation of the Adani stocks was not a surprise, the detailed allegations of fraud and market manipulation are pretty horrendous. There have been rumours about the same on social media last year, but the regulators never took a stand, and the allegations died down. At the same time, the Adani stocks continued to grow and even be included in the index," said Sonam Srivastava- Founder and CEO at Wright Research.
“While the tug of war is still going on between Adani and Hindenburg, it is quite clear that Adani has had very little auditory supervision, almost no coverage by analysts and the regulator has not taken any steps to investigate their business processes or price actions. We hope that this situation gets clarified, regulators step up and any wrongdoing or lack thereof comes our clearly for all the capital market participants," Srivastava added.
Since the January 24 Hindenburg report which alleged improper use by the Adani Group of offshore tax havens and stock manipulation and also raised concerns about high debt, the market-capitalisation of seven listed Adani Group companies has fallen by half or nearly $100 billion. Its dollar bonds have tumbled, reported Reuters.
To be sure, analysts say, the shock to the system comes because of Adani's heft and influence, rather than exposure. His conglomerate spans ports, coal mines, food businesses, airports and lately media, and before the rout its seven companies had accounted for more than 6% of the National Stock Exchange market value.
“The Hindenburg report alleges that such instances of capital market manipulation are common in India and no one can stand against these issues, which is simply not true as India has a transparent and highly regulated capital market. I truly wish that the whole nation is not coloured based on the actions of one business conglomerate. Indian business environment aside from this issue remains robust and growing," Sonam Srivastava of Wright Research said.
(With inputs from Reuters)
