Adani group’s market cap falls below ₹10 lakh crore as sell-off continues

• The combined market capitalisation of the nine Adani group companies fell below ₹10 lakh crore after the rout in the group stocks continued on Tuesday.
  
• The nine group companies have jointly lost ₹12.05 lakh crore in market capitalisation since the Hindenburg report was released on January 24.
  
• Last week, ratings agency Moody’s announced an outlook cut for four companies of the group, citing a rapid decline in their market value.
  

The sell-off in Adani group stocks continued on Tuesday, resulting in the group’s market capitalisation falling below the ₹10 lakh crore mark. Eight out of the nine Adani group stocks were in the red in the first two hours of trade on Tuesday, with five of them hitting their respective lower circuits.

The sell-off has resulted in a ₹12.05 lakh crore decline in the combined market capitalisation of the Adani group since January 24, when the Hindenburg report was first published, alleging stock manipulation and accounting fraud.

As a result, the Adani group’s current market capitalisation stands at ₹9.89 lakh crore, which is just 45% of what it was on January 24.

As of 11 am on Tuesday, the nine Adani group companies’ cumulative market capitalisation declined by ₹31,525 crore, with five stocks hitting their respective lower circuits.

Last week, ratings agency Moody’s cut the outlook for four group companies, citing a rapid decline in their market value.

The rout in Adani group stocks has also resulted in Gautam Adani going from being third to the 24th richest person in the world on the Bloomberg Billionaires Index. His wealth now stands at $52.4 billion, down by $66.6 billion since January 24, when Hindenburg’s report was published.


Source: NSE, as of 11 a.m., February 14, 2023

Amongst the nine group companies, Adani Total Gas has lost the most value at 71%, while cement maker ACC has been the most resilient, losing only 22% of its value.

Moody’s cites rapid market cap decline in its outlook cut

The rating agency announced a change in its outlook on Adani group companies following the rout in the group’s stocks.

Moody’s downgraded its outlook to ‘negative’ from ‘stable’ for Adani Green Energy, Adani Green Energy Restricted Group, and two subsidiaries of Adani Transmission.

“These rating actions follow the significant and rapid decline in the market equity values of the Adani group companies following the recent release of a report from a short-seller highlighting governance concerns in the group,” Moody's said in its note.

However, Moody’s retained its outlook for Adani Ports & SEZ, Adani International Container Terminal and two other companies.

In a press conference following the Reserve Bank of India’s monetary policy meeting last week, RBI governor Shaktikanta Das said that Indian banks are in compliance with its regulations as far as exposure to the Adani group is concerned.

"The RBI has made its own assessments. The large exposure guidelines prescribed by the RBI are fully complied with by all the banks,” Das said.

"When banks lend money to a company or a group of companies, the banks do not lend on the basis of market capitalisation of that particular company," he added.

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