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India’s richest person Gautam Adani lost his biggest title of being Asia’s Richest person. On Wednesday, his stocks deepened to $74 billion.
Wednesday’s stock losses witnessed Adani slip to 15% on Forbes rich list with an estimated net worth of $75.1 billion, below rival Mukesh Ambani.
The loss gave a mark of a dramatic setback for Adani. Last week, a report by Hindenburg Research raised a question about high debt and the valuations of seven listed Adani companies.
The losses represented a significant setback for Adani. The billionaire turned to business after dropping out of school. His fortunes rose quickly in recent years, along with his company’s stock values, including ports, airports, mining, cement, and power.
The tycoon is currently battling to protect his reputation and stabilize his businesses. The stock declines occurred just one day after the Adani group served investor backing for a $2.5 billion share slaw for flagship company Adani enterprises.
According to the report released by Hindenburg Research last week, the Adani group is engaged in stock manipulation and improper use of offshore tax havens.
On the other hand, the group has denied the allegations saying the short seller’s narrative of stock manipulation has “no basis” and stems from an ignorance of Indian Law.
“The kind of fall we are seeing in Adani stocks is scary,” said Avinash Gorakshakar.
Moreover, Adani Power and Adani Wilmar fell 5% each. At the same time, Adani’s Total Gas slumped by 10%.
Even though the group managed to dally support from investors to complete a share sale for the flagship company.
“There was a slight bounce yesterday after the share sale went through, after seeming improbable at a point, but now the weak market sentiment has become visible again after the bombshell Hindenburg report,” said Ambareesh Baliga, a Mumbai-based independent market analyst.
“With the stocks down despite Adani’s rebuttal, it clearly shows some damage to investor sentiment. It will take a while to stabilize, Baliga added.
Data also revealed that foreign investors sold a net of $1.5 billion worth of Indian equities since the Hinderburg report. The most significant outflow over four consecutive days since September 30.
According to Hinderburg, it had shorted the U.S. bond, and non-India traded derivatives of the Adani group.
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