The share prices of Indian billionaire Gautam Adani’s companies collapsed during the rest of the week after a report by a US company accused the company of financial misconduct.
World the energy pot of an Indian who is among the richest people by Gautam Adani Tens of billions of dollars have disappeared from the market value of the group of companies in just a few days after a US stock research company accused it of financial misconduct on Tuesday.
According to the Reuters news agency, the combined market value of the seven most important listed companies belonging to the Adani Group alone has melted since Wednesday 48 billion dollars, or about 44 billion euros. News agency Bloomberg again calculates that the group’s market value has already decreased by 51 billion dollars.
The slide of Adani’s listed companies started on Wednesday and continued on Friday. On Thursday, the Indian stock market was closed.
The share of the group’s flagship company Adani Enterprises fell by 18.5 percent on Friday. Shares in Adani Total Gas, Adani Green Energy and Adani Transmission all fell 20 percent, when trading in them was automatically suspended, according to Reuters.
Adani Ports and Special Economic Zone’s share fell 16.3 percent and Adani Power’s share fell five percent.
Last The shares of the listed companies of the Adani Group, which had grown at a tremendous pace in the years, began to decline significantly when the US investment research company Hindenburg Research published extensive reportaccording to which there are significant ambiguities in the financial management of Adani’s companies.
In the title of his report, Hindenburg calls Adani’s operation “the biggest corporate fraud in history”. The research company pays attention to, for example, Adani Group’s tax haven linkages and the high debt burden of Adani Group companies, as well as the inflated value of the shares.
Hindenburg is known in the United States as an activist short seller.
In short selling, the investor believes that the share price will fall, borrows the shares from another investor and sells the borrowed shares on. If the price falls, the borrower can buy back the share at a cheaper price, return the share to the original owner and make a profit equal to the fall in the share price.
In connection with its report, Hindenburg says that it has also short-sold securities and derivatives related to the Adani Group, so the research company benefits financially from the weak success of Adani’s companies.
News agency Bloomberg’s according to Hindenburg, starting in 2020, he has set his sights on around 30 companies.
According to Bloomberg’s calculations, the companies’ share prices typically fell by around 15 percent the day after the Hindenburg report and had fallen by an average of 26 percent half a year after the report was published.
One example of the companies targeted by the research company is the electric car manufacturer Nikola, whose founder Trevor Milton was convicted last fall of defrauding investors.
Adani Group is, however, by far the largest company that Hindenburg, with around ten employees, has hit his nails into so far.
Gautam Adani’s multi-industry empire built over decades is one of India’s largest business conglomerates, and according to Bloomberg and Reuters, for example, Adani is considered to be India’s prime minister By Narenda Modi a close supporter.
Adani Group denied Hindenburg’s claims on Thursday and, according to Bloomberg, has said it will publish a detailed response to the research company’s claims on Friday.
Adani Group called Hindenburg’s report malicious and poorly researched, according to Bloomberg. It also said it was exploring legal action against the US company.
Hindenburg has said that he investigated the Adani Group’s operations for two years. It responded to Adani Group’s counter-accusations on Twitter on Thursday and said it welcomed possible legal action.
“If Adani is serious, it should also file a lawsuit in the United States, where we operate. We have a long list of documents that we would require in the information acquisition phase of the legal process,” Hindenburg wrote in his announcement.
Hindenburg the report was published at an awkward time from Adani Group’s point of view, as the group’s flagship company Adani Enterprises launched India’s largest share offering on Friday, with the aim of raising $2.5 billion to pay off debts, for example.
According to Bloomberg, Adani had attracted a number of anchor investors before the publication of the Hindenburg report.
According to Bloomberg, only one percent of Adani’s public offering had been registered as of noon Finnish time on Friday. According to the news agency, however, Indian investors typically wait until the last day of IPOs before subscribing to shares.
On the other hand, after the dives on Wednesday and Friday, Adani Enterprises’ share price remained at 2,761 Indian rupees, or just over 31 euros, which is less than the lower limit of the price bracket of 3,112 rupees, or about 35 euros, for the shares offered in the share issue.
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