India's Adani shares nosedive on worries about Hindenburg fallout

NEW DELHI: Shares of India's Adani Group extended declines on Friday to take their market losses to $115 billion amid growing concern about any systemic impact from disarray triggered by a U.S. short-seller report critical of the group's finances.

Spooked investors have dumped stocks of seven of the group's listed stocks since Hindenburg Research last week questioned the group's debt levels and use of tax havens.

Lawmakers have since called for a wider probe into the matter, and sources have told Reuters that the central bank has asked lenders for details of their exposure to the group.

In one of the biggest setbacks for chairman Gautam Adani, the group shelved its $2.5 billion share sale on Wednesday which would otherwise have taken place at the height of the rout.

In Friday trade, the share price of Adani Enterprises Ltd - the group's flagship company - plunged 30% to its lowest since April 2021, taking losses to nearly $33 billion since last week. Since the Hindenburg report, the stock has lost 68%.

Adani Ports and Special Economic Zone Ltd was down 6%, while Adani Transmission Ltd and Adani Green Energy Ltd slumped 10% each. Adani Total Gas Ltd - a joint venture with France's TotalEnergies SE - fell 5%.

Hindenburg in its report said key listed Adani companies had "substantial debt" and that shares in seven Adani listed firms have an 85% downside due to what it called sky-high valuations. It also alleged stock manipulation.

The Adani Group said the allegation of stock manipulation had "no basis" and stemmed from ignorance of Indian law. Its response stated that over the past decade, group companies have "consistently de-levered".

In an another blow, S&P Dow Jones Indices on Thursday said it would remove flagship firm Adani Enterprises Ltd from widely used sustainability indices on Feb. 7, making the shares less appealing to environment-conscious investors.

In total, the seven listed Adani Group companies now have a market capitalisation of $102 billion, versus $217 billion before the Hindenberg report.

The meltdown in share prices marks a dramatic turn of fortune for Adani, who in recent years forged partnerships with, and attracted investment from, foreign giants as he pursues global expansion in sectors as varied as ports and power.

Adani is also no longer Asia's richest person, and has slid to 17th in Forbes' rankings of the world's wealthiest people. The 60-year-old had been third behind Elon Musk and Bernard Arnault. Indian rival Mukesh Ambani of Reliance Industries Ltd is now Asia's richest person. - Reuters

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