Gautam Adani loses more money than Ambani, Damani post Hindenburg report

The massacre of Adani Group's stocks since Hindenburg's report led to an erosion of billions of dollars of the wealth of Gautam Adani. His wealth has been scrapped by more than half pushing him out of the top 20 ranks at Bloomberg Billionaire Index. Among the top three billionaires who lost more money, year-to-date, are Gautam Adani, Mukesh Ambani, and Radhakishan Damani. But the loss in Adani's net worth is multi-fold compared to Ambani and Damani.

On Bloomberg Billionaire Index, as of February 4th, Gautam Adani tops the chart of losing more money year-to-date followed by Mukesh Ambani and Radhakishan Damani.

The index is a daily ranking of the world’s richest people.

According to the index, Adani so far in the year has lost $61.6 billion --- with rank toppling down to 21st. Adani who was among the top 3 richest men in the world couple of weeks ago, now has a net worth of $59 billion.

Meanwhile, Reliance Industries chief Mukesh Ambani who holds 12th rank on the index -- has a net worth of $80.7 billion as of February 4. Ambani's wealth has dipped by $6.36 billion year-to-date.

Ambani has regained his title of being the richest man in India and Asia.

On the other hand, Avenue Supermarts (DMart) founder Radhakishan Damani has lost $2.61 billion in wealth year-to-date. His net worth stood at $16.7 billion, at 102nd rank.

Year-to-date, on the index, CEO of Tesla and Twitter, Elon Musk's wealth has witnessed the biggest jump of $37.6 billion, taking him to the 2nd rank of the rich list with a total net worth of $175 billion.

Louis Vuitton's founder Bernard Arnault has garnered the second-highest jump in his wealth so far in the year by $33.7 billion --- making him the richest man in the world with a net worth of $196 billion.

Social media giant Facebook's founder Mark Zuckerberg has so far seen the third highest jump in his net worth by $23.5 billion -- taking his rank to 13th with a total wealth of $69.1 billion.

What to led to the storm at Adanis? 

Frantic dives in Adani Group's seven listed stocks since January 24 have wiped out over 100 billion dollars of valuation of the conglomerate. The impact had to be seen in Gautam Adani's net worth as well.

Adani Enterprises: On Friday, after touching a new 52-week low of ₹1,017.10 apiece, the group's flagship company picked up momentum to close at ₹1,584.20 apiece up by 1.25% on BSE.

This stock nosedived by over 47% between February 1st and 2nd after the withdrawal of ₹20,000 crore FPO despite the issue getting subscribed fully. The stock has plummeted by nearly 54% since January 24th which was the day Hindenburg released its report with a host of allegations on the group.

Adani Ports: Similar was the case with this stock on Friday. After touching a new 1-year low of ₹394.95 apiece, the stock gained traction to end at ₹498.85 apiece up by 7.98% on BSE. Adani Ports announced operational performance in January 2023, under which, it handled 27.6 MMT of total cargo, implying a YoY growth of 11%.

Between February 1-2nd, the stock dipped by 25%. Since January 24th, the stock has plunged by over 34%.

Adani Power: Unlike the above two Adani stocks, Adani Power touched a 5% lower circuit for the seventh consecutive day on Friday to end at ₹192.05 apiece. Since January 24th, the stock has tumbled by a little over 30% on BSE.

Adani Transmission: The stock hit a 10% lower circuit for the second day in a row on Friday to end at ₹1,401.55 apiece on BSE. This would also be its fresh 52-week low. In the last three trading sessions, the stock fell by nearly 21%. Since January 24, this Adani stock dipped by over 49% on D-Street.

Adani Total Gas: This stock has been in red for nine days in a row. On Friday, the stock hit its seventh consecutive lower circuit. On BSE, it ended at ₹1,625.95 apiece down by 5%. Since January 24, the stock has shed over 58% on D-Street.

Adani Green Energy: The stock dropped to a fresh 52-week low which was also its 10% lower circuit at ₹934.25 apiece on BSE. In three trading sessions, the stock declined by nearly 24% on BSE. Since January 24th, the stock has dropped by over 51%.

Adani Wilmar: Adani's FMCG player froze at a 5% lower circuit for seven days in a row on Friday at ₹400.40 apiece on BSE. Since January 24, the stock has dived by over 30%.

On recovery in some of Adani stocks on Friday, Vinod Nair, Head of Research at Geojit Financial Services said, "The Adani saga has created large turbulence during the week, and as a result, the market failed to shy away from its instability even after a well-tuned budget that placed a strong emphasis on consumption and capex." He added, "the uptick in Adani Group stocks following the confident statement by Total Energies, a large French energy company, also raised the sentiment of the market."

On Friday, European multinational integrated energy and petroleum company, TotalEnergies released information on its joint investments in India in partnership with Adani since 2018. As of December 31, 2022, TotalEnergies' exposure resulting from these stakes is limited, as it represents 2.4% ($3.1 billion) of the Company’s capital employed and only $180 million of net operating income in 2022.

TotalEnergies also said, it "welcomes the announcement by Adani to mandate one of the "big four" accounting firms to carry out a general audit." TotalEnergies which is among the seven supermajor oil companies, holds a stake in Adani Total, Adani Total Gas, Adani Green Energy, and AGEL23.

On Saturday, Bloomberg News reported that Adani Enterprises has shelved a plan to raise as much as 10 billion Indian rupees.

Also, Reuters earlier this week reported that the Indian markets regulator is already investigating the matter, including the crash in the company's shares, any irregularities in the now-shelved share sale, and any possible price manipulation.

The troubled days in Adani stocks come after a New York-based investment research firm, Hindenburg Research, accused Adani of stock manipulation and fraud schemes.

Hindenburg's research report dated January 24, said, "we reveal the findings of our 2-year investigation, presenting evidence that the ₹17.8 trillion ($218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades." However, Adani's top management had denied Hindenburg's accusations, calling the research report of latter as "maliciously mischievous, unresearched report".

Both Adani and Hindenburg are in a tug of war. In an aftermath of the report, Adani also called off its $2.5 billion FPO on February 1 despite the issue fully subscribing.

Talking about the impact of the withdrawal of FPO, Nirav Karkera, Head of Research at Fisdom said, "The FPO was critical to funding capital-intensive growth projects in critical segments of green hydrogen, greenfield expressway construction and additional developmental work in select airport projects. A component of the proceeds was earmarked to service debt to the tune of ₹4,000 crore." Karkera added, "the withdrawal of the FPO has not just caused an urgent demand for the amount needed for the debt servicing but is also expected to slow the progression of growth ventures in planned sunrise businesses."

Also, Fisdom expert believes while the company seems confident of being able to run planned operations and service upcoming debt obligation through internal accruals, it is almost obvious that the group will either need to pace out its ambitious expansionary roadmap or seek alternative sources of funding which would come at a relatively higher cost.

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