Despite the offer being completely subscribed on Tuesday, Adani cancelled the share offering on Wednesday as a stock rout prompted by U.S. short-seller Hindenburg’s objections escalated. Adani has also lost his position as Asia’s richest man as a result of the short-seller’s attack.
Adani Enterprises, the group’s dominant company, fell 10% after Thursday’s stronger opening. Adani Power and Adani Wilmar both experienced declines of 5%, while Adani Ports and Special Economic Zone, Adani Total Gas, Adani Green Energy, and Adani Transmission all experienced declines of 10%.
An humiliating turn of events for the billionaire who has partnered with foreign parties in his global expansion of industries ranging from ports to mining to cement is the stock market crash and postponement of the share sale. Adani dropped from third place last week to 16th on Forbes’ list of the world’s wealthiest people.
Video Courtesy: Forbes Middle East
Government and banking sources told Reuters on Thursday that India’s central bank has requested information from regional banks regarding their exposure to the Adani group of enterprises. In the fiscal year ending in March 2022, according to CLSA, Indian banks were exposed to nearly 40% of the 2 trillion rupees ($24.53 billion) in debt held by the Adani group.
The Adani group said earlier this week that it had the full support of investors, but since, investor trust has waned. According to a source with firsthand knowledge of the situation on Thursday, Citigroup’s wealth division has stopped offering its clients margin loans secured by securities of the Adani Group. Citi opted not to respond.
The Adani group was accused of stock manipulation and inappropriate exploitation of offshore tax havens in Hindenburg’s research from last week. High debt and the values of seven listed Adani companies were other issues that were brought up. The Adani group has refuted the charges, claiming that the stock manipulation claim made by the short seller has no validity and is the result of a misunderstanding of Indian law. The group also said that it has always provided the relevant regulatory disclosures.
Despite the fact that the stock’s market price was below the issue’s offer price on Tuesday as shares fell following the release of the Hindenburg report, Adani was nevertheless able to secure the subscriptions for the share sale. However, on Wednesday, markets fell once again. Adani announced his decision to cancel the share sale late on Wednesday night, citing the company’s stock price’s fluctuation during the day. The board of the corporation determined that moving further with the matter would not be morally right given these unique circumstances.
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