Adani loses Asia’s richest crown as shares deepen to $84 billion

BENGALURU (Reuters) – Shares of India’s Gautam Adani conglomerate fell again on Wednesday as rout in his companies worsened to $84 billion in the wake of a short-selling report in the United States, and the billionaire lost his title as Asia’s richest man. Person.

Wednesday’s stock losses pushed Adani down to 15th on Forbes’ rich list with an estimated net worth of $76.8 billion, below rival Mukesh Ambani, chairman of Reliance Industries Ltd. (RELI.NS) Who ranks ninth with a net worth of $83.6 billion.

Before the monetary report by the Hindenburg Company, a short-selling company in the US, Adani ranked third.

The losses represent a dramatic setback for Adani, a school dropout turned billionaire whose business interests stretch from ports and airports to mining and cement. Now, the businessman is fighting to stabilize his business and defend his reputation.

It comes just a day after the group managed to rally support from investors for a $2.5 billion sale of shares of flagship Adani Enterprises on Tuesday, in what some saw as a seal of investor confidence.

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A Hindenburg Research report last week alleged improper use by the Adani Group of offshore tax havens and equity manipulation. It also raised concerns about the high debts and valuations of seven companies listed in “Adani”.

The group denied the allegations, saying that the short sellers’ account of stock manipulation was “baseless” and stemmed from ignorance of Indian law. It added that it had always made the necessary regulatory disclosures.

Shares in Al-Adani projects (ADEL.NS)Adani, often described as the business incubator of Adani, fell 30% on Wednesday. Adani Power (ADAN.NS) Adani Total Gas fell 5 percent (ADAG.NS) It fell 10%, falling below the daily price limit.

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Bring me back the transmission (ADAI.NS) And fell by 6% and the ports of Adani and the Special Economic Zone (APSE.NS) decreased by 20%.

Adani Total Gas is a joint venture with the French company Total (TTEF.PA)was the biggest casualty of the short seller’s report, losing about $27 billion.

“There was a slight bounce yesterday after the stock sell-off was completed, after looking unlikely at one point, but the weak market sentiment is now visible again after the explosive Hindenburg report,” said Ambaresh Palega, an independent market analyst in Mumbai.

“With stocks falling despite Adani’s rebuttal, it clearly shows some damage to investor sentiment. It will take some time to settle,” Palega added.

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Underscoring the tension in some quarters, Bloomberg reported on Wednesday that Credit Suisse (CSGN.S) It has stopped accepting bonds of the Adani Group of Companies as collateral for margin loans to its private banking clients.

This was a big factor in the shares’ decline on Wednesday, said Deven Choksey, managing director of KRChoksey Shares and Securities.

There was no immediate comment from Credit Suisse.

Scrutiny of the conglomerate is mounting, with an Australian regulator saying on Wednesday it would review Hindenburg’s allegations to see if further investigations were warranted.

The data also showed that foreign investors sold $1.5 billion worth of Indian stocks after the Hindenburg report – the largest outflow in four consecutive days since Sept. 30.

The Adani group’s headaches are expected to continue for some time.

The Indian Markets Regulatory Authority, which was looking at conglomerate deals, said it would Add The Hindenburg Report to its own preliminary inquiry.

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State run life insurance corporation (LIC) (LIFI.NS)He said On Monday, it will seek clarification from Adani’s management regarding the short seller report. However, the insurance giant was a major investor in the sale of Adani Enterprises shares.

Hindenburg said in its report that it downgraded US bonds and derivatives traded outside India for Adani Group.

Additional reporting by Chris Thomas in Bengaluru and Aditi Shah in New Delhi; Additional reporting by Bharat Rajeshwaran and Aditya Kalra; Editing by Edwina Gibbs and Mark Potter

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