Adani crisis: Indian group has value cut in half after stock market rout

The beleaguered empire of nan Indian billionaire Gautam Adani is spiralling into crisis, arsenic an escalating stock rout triggered by fraud claims cuts nan worth of his conglomerate successful half.

Traders sent shares successful nan listed flagship Adani Enterprises down much than 25% soon aft markets opened successful Mumbai connected Friday, contempt attempts by nan institution to reconstruct investor confidence. Other listed entities, specified arsenic Adani Green Energy and Adani Ports, were besides down sharply.

The relentless trading has now wiped much than US$115bn from nan worth of Adani companies successful nan 2 weeks since US-based Hindenburg Research accused nan conglomerate of banal manipulation and accounting fraud.

Adani companies were worthy a mixed US$220bn earlier nan study was published.

The companies, spanning ports, power, ember and renewables, accused Hindenburg successful a 413-page rebuttal of engaging successful a calculated onslaught connected India, while noting that nan US investor, an activistic short seller that profits from falling stock prices, is making money from nan chaos.

The plunging stock prices raise questions astir really Adani, which runs Australia’s contentious Carmichael coalmine and obstruction task successful Queensland, tin raise superior erstwhile nan marketplace has turned truthful aggressively against it. There is besides nan imaginable of forced plus sales.

Reuters reported that Adani entities made scheduled payments connected outstanding bonds connected Thursday, adding that nan conglomerate plans to rumor a in installments study by nan extremity of nan week to reside liquidity concerns.

Pressure connected Adani’s finances intensified this week aft it abandoned a much-vaunted US$2.5bn stock sale, which would person been used, successful part, to salary down debt. The fundraising was pulled because participating investors would person suffered ample losses should nan waste person gone up fixed falling stock value movements.

“We person an impeccable way grounds of servicing our debt,” Adani said successful a video reside aft abandoning nan fundraising. “This determination will not person immoderate effect connected our existing operations and early plans.”

The billionaire president has support from a salient Abu Dhabi investor pinch ties to nan royal family, on pinch investor and governmental support from wrong India.

On Friday, Adani responded to critics of his evident adjacent ties to India’s premier minister, Narendra Modi, dismissing claims his companies had avoided oversight.

“The truth of nan matter is that my master occurrence is not because of immoderate individual leader,” he told India Today television, according to an AFP report.

Political guidance groups successful India are pressuring parliament to statement nan effect of nan Adani fraud claims connected investors and nan country’s banking sector. There are besides calls for an independent probe into nan allegations.

The astir melodramatic claims mention to what Hindenburg calls a “brazen banal manipulation and accounting fraud scheme” that has driven up nan value of nan listed Adani companies, and inflated nan nett worthy of its billionaire chairman.

Hindenburg alleges that this is done by utilizing ammunition companies to manipulate nan value of nan listed ones by holding ample positions.

Adani has denied nan allegations and said immoderate dealings pinch related parties were decently accounted for.

The chairman’s personal nett worthy has taken a important hit, according to nan Bloomberg billionaires index. After sitting alongside Jeff Bezos and Bill Gates among nan world’s richest conscionable a mates of weeks ago, Adani has dropped retired of nan apical 20 erstwhile Friday’s stock value falls are taken into account.