Adani Group, led by billionaire Gautam Adani, has faced a series of setbacks over the past week, resulting in a market loss of $100 billion. The downward trend in Adani Group stocks started with the release of a report by Hindenburg Research on January 24th. The report accused the company of committing “a brazen stock manipulation and accounting fraud scheme over the course of decades,” leading to a significant sell-off of shares in Adani’s firms.
MSCI Scrutinizes Adani Group After Hindenburg Report
As a result of the report, index provider MSCI is seeking feedback on Adani Group and its associated securities. In response to the report, Adani Group released a 413-page statement refuting all of Hindenburg’s claims. Despite Adani Group’s efforts to defend their financials, their stocks continued to decline, and their follow-on public offering (FPO) was ultimately canceled, despite being fully subscribed.
Gautam Adani loses billionaire status after Adani Group setbacks
The recent developments have taken a significant toll on Gautam Adani’s personal wealth, causing him to lose his title as the richest Asian and Indian man and fall out of the top 10 billionaires in the world. Additionally, Credit Suisse Group AG and Citigroup Inc.’s wealth arm have stopped accepting bonds and securities of Adani Group as collateral for margin loans. The Reserve Bank of India (RBI) has also requested details from lenders on their exposure to Adani Group.
10 Setbacks for Adani Group in a Week:
- On January 24th, Hindenburg Research made a bold claim against Adani Group, alleging that the company was involved in a long-standing scheme of stock manipulation and accounting fraud.
- The Hindenburg report led to a sell-off in Adani’s stocks, wiping out $100 billion in market value as of Thursday.
- MSCI said it is seeking feedback on Adani Group and associated securities after the Hindenburg report.
- Adani Group issued a 413-page statement rebutting all of Hindenburg’s claims, calling it an attack on India’s growth story and ambition. Hindenburg said the statement failed to answer its questions.
- Adani’s personal wealth has declined significantly, losing his position as the richest Asian and Indian man to Mukesh Ambani, and dropping out of the top 10 billionaires in the world.
- Credit Suisse Group AG stopped accepting bonds of Adani’s companies as collateral for margin loans to private banking clients.
- Citigroup Inc.’s wealth arm stopped accepting securities of Adani’s companies as collateral for margin loans.
- Adani Enterprises’ FPO was canceled even though it was fully subscribed. Adani said the group decided to call off the share sale to protect investors from potential losses.
- Bonds of Adani’s flagship firm dropped to distressed levels in US trading.
- The Reserve Bank of India (RBI) asked lenders for details of their exposure to the Adani group.
Adani Group, led by founder Gautam Adani, is the largest port operator in India and has interests in infrastructure, commodities, power, and real estate. The group recently bought cement firms ACC and Ambuja Cements for $10.5 billion.
