Gautam Adani’s Wealth Almost Halved by Stock-Price Plunge
The net worth of Indian billionaire
Gautam Adani
has fallen by around $58 billion over the past week and a half, the result of a rout in stock prices linked to his namesake conglomerate following the publication of a report by a U.S. short seller.
The combined market value of shares owned by India’s Adani Group has halved since New York-based Hindenburg Research published a report on Jan. 24 that alleged fraud and stock-market manipulation at the business, among other allegations. Adani has denied the claims.
The 60-year-old Indian industrialist’s net worth was $61 billion on Feb. 3, according to the Bloomberg Billionaires Index, down from $119 billion before Hindenburg released its report. Late last year, his wealth reached $147 billion, surpassing that of Amazon.com Inc.’s founder,
Jeff Bezos.
On Friday, share of five companies bearing Mr. Adani’s name fell 5% to 10%, while two others, including
Adani Enterprises Ltd.,
ended the day higher after falling heavily in the morning. That brought the combined loss in market value across the seven companies to $108 billion since Tuesday of last week, according to FactSet data. They were valued at around $217 billion before the report’s release.
Adani Enterprises, the flagship unit of Mr. Adani’s sprawling business empire, had planned to raise more than $2 billion from a share sale that it ultimately decided to cancel on Wednesday. Mr. Adani said it wouldn’t be morally correct to proceed with the sale, which would have left investors nursing immediate losses.
One of the allegations made by Hindenburg was that the Adani Group uses shell companies to boost stock prices and flout India’s shareholding rules. The Adani Group released a 413-page report hitting back at Hindenburg’s allegations.
The Adani Group didn’t respond to a request for comment.
The price of bonds issued by Adani companies also fell this week, although they have started to rebound slightly. An Adani Green Energy Ltd. bond that is due in September 2024 was yielding more than 32% on Friday, down from 40% earlier in the week, according to Tradeweb data. The bond was yielding around 10% throughout most of January. Bond yields rise when prices fall.
Credit-rating firm Fitch Ratings said Friday that it foresees no immediate impact on the credit quality of Adani companies from the publication of Hindenburg’s report, nor any material changes to the group’s expected cash flow.
In one of the first Indian government’s comments on the matter, India’s Finance Minister
Nirmala Sitharaman
said the continuing market turmoil should have a limited impact on
Life Insurance Corp. of India
and
State Bank of India,
two state-run entities that have invested billions of dollars into Adani companies.
French energy company
TotalEnergies SE
said Friday that it had exposure to Adani companies worth around $3.1 billion. The company said it owned half of both Adani Total Private Ltd., a liquefied natural gas joint venture, and AGEL23, a green energy partnership. It also owns 37.4% of
Adani Total Gas Ltd.
and 19.75% of Adani Green Energy Ltd.
TotalEnergies, which hasn’t revalued these stakes after the recent market slide, said the stakes are small compared with its overall portfolio—representing around 2.4% of the capital it has invested.
Write to Weilun Soon at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
The net worth of Indian billionaire
Gautam Adani
has fallen by around $58 billion over the past week and a half, the result of a rout in stock prices linked to his namesake conglomerate following the publication of a report by a U.S. short seller.
The combined market value of shares owned by India’s Adani Group has halved since New York-based Hindenburg Research published a report on Jan. 24 that alleged fraud and stock-market manipulation at the business, among other allegations. Adani has denied the claims.
The 60-year-old Indian industrialist’s net worth was $61 billion on Feb. 3, according to the Bloomberg Billionaires Index, down from $119 billion before Hindenburg released its report. Late last year, his wealth reached $147 billion, surpassing that of Amazon.com Inc.’s founder,
Jeff Bezos.
On Friday, share of five companies bearing Mr. Adani’s name fell 5% to 10%, while two others, including
Adani Enterprises Ltd.,
ended the day higher after falling heavily in the morning. That brought the combined loss in market value across the seven companies to $108 billion since Tuesday of last week, according to FactSet data. They were valued at around $217 billion before the report’s release.
Adani Enterprises, the flagship unit of Mr. Adani’s sprawling business empire, had planned to raise more than $2 billion from a share sale that it ultimately decided to cancel on Wednesday. Mr. Adani said it wouldn’t be morally correct to proceed with the sale, which would have left investors nursing immediate losses.
One of the allegations made by Hindenburg was that the Adani Group uses shell companies to boost stock prices and flout India’s shareholding rules. The Adani Group released a 413-page report hitting back at Hindenburg’s allegations.
The Adani Group didn’t respond to a request for comment.
The price of bonds issued by Adani companies also fell this week, although they have started to rebound slightly. An Adani Green Energy Ltd. bond that is due in September 2024 was yielding more than 32% on Friday, down from 40% earlier in the week, according to Tradeweb data. The bond was yielding around 10% throughout most of January. Bond yields rise when prices fall.
Credit-rating firm Fitch Ratings said Friday that it foresees no immediate impact on the credit quality of Adani companies from the publication of Hindenburg’s report, nor any material changes to the group’s expected cash flow.
In one of the first Indian government’s comments on the matter, India’s Finance Minister
Nirmala Sitharaman
said the continuing market turmoil should have a limited impact on
Life Insurance Corp. of India
and
State Bank of India,
two state-run entities that have invested billions of dollars into Adani companies.
French energy company
TotalEnergies SE
said Friday that it had exposure to Adani companies worth around $3.1 billion. The company said it owned half of both Adani Total Private Ltd., a liquefied natural gas joint venture, and AGEL23, a green energy partnership. It also owns 37.4% of
Adani Total Gas Ltd.
and 19.75% of Adani Green Energy Ltd.
TotalEnergies, which hasn’t revalued these stakes after the recent market slide, said the stakes are small compared with its overall portfolio—representing around 2.4% of the capital it has invested.
Write to Weilun Soon at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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