Adani Enterprises shares fall more than 30%, hitting multiple trading stops

Mumbai:

Billionaire Gautam Adani denied on Friday that his rise to become Asia’s richest man – a title he lost in a phenomenal stock market rout – was due to Prime Minister Narendra Modi, as shares of his conglomerate collapsed again.

The combined market capitalization of its listed units has plummeted by more than $100 billion since US short seller Hindenburg Research – which makes money by betting on falling stocks – released an explosive report last week last.

He accused the Adani Group of accounting fraud and artificially inflated its stock price, calling it “brazen stock manipulation and accounting fraud” and “the biggest scam in corporate history”.

The group pushed back against claims that Mr Adani’s close relationship with Prime Minister Modi, also from Gujarat state, helped him win business and avoid proper scrutiny.

“These allegations are baseless,” Mr Adani told India Today on Friday, adding that their common origins made him an “easy target” for such claims.

“The point is that my professional success is not due to an individual leader,” he insisted.

His comments came as shares of his flagship company Adani Enterprises were repeatedly suspended on the Bombay Stock Exchange, reaching multiple trading stops on the verge of falling 35%.

Adani Power, Adani Green Energy, Adani Total Gas – of which French giant TotalEnergies has a 37.4% stake – and Adani Transmission were also suspended when they reached their limits.

Mr Adani himself saw his fortune plummet by tens of billions of dollars, dumping him out of the Forbes Realtime Rich 20 list, where he was third.

Late Wednesday, his main company canceled a $2.5 billion share sale intended to help reduce debt levels – a long-standing concern – restore confidence and broaden its shareholder base.

The show failed to attract “mom and dad” retail investors and was only sold thanks to large institutional buyers, other Indian tycoons and $400 million from IHC des United Arab Emirates.

Adani Enterprises’ board said in a statement that moving forward with the issue “would not be morally correct” and that it would refund all payments.

Major banks, including Credit Suisse and Citigroup, have stopped accepting Adani bonds as collateral for loans to private clients, according to Bloomberg News.

This has fueled concerns over how Adani will raise new funds, with Adani dollar bonds trading at distressed levels and signs of contagion in Indian markets rising, Bloomberg reported.

According to Hindenburg Research, Adani artificially boosted the share price of its units by funneling money into the stocks through offshore tax havens.

The group had enjoyed what he called a “decades-long pattern” of government leniency, and that “investors, journalists, citizens and even politicians were afraid to speak out for fear of reprisals”.

The Adani Group said it was the victim of a “malicious and malicious” reputational attack and released a 413-page statement on Sunday which it said showed Hindenburg’s claims were “nothing but a lie”.

Hindenburg said in response that Adani did not answer most of the questions raised in his report.

The Reserve Bank of India has asked lenders for details of their exposure to the Adani Group – whose interests include ports, telecommunications, airports, media and coal, oil and solar power – Bloomberg reported citing anonymous sources.

In his interview on Friday, Mr Adani said only 32% of his companies’ loans were owed to Indian banks, with almost half of their debt obtained through international bonds.

Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group company.