Adani group marketcap falls by over ₹45,000 crore on Wednesday

• Negative market sentiments rubbed off on Adani group stocks on Wednesday.
  
• Four out of nine group stocks hit lower circuits in the first two hours of trading.
  
• The cumulative marketcap of the nine Adani group companies declined by ₹45,623 crore.
  
• The group’s current marketcap has fallen to ₹8.7 lakh crore, down from ₹21.94 lakh crore on January 24.
  

Negative market sentiments rubbed off on Adani group stocks on Wednesday, with the flagship Adani Enterprises witnessing the most selling. Four out of nine of group stocks hit their respective lower circuits in the first two hours of trading, with the cumulative market capitalisation of the group falling by ₹45,623 crore.

Market-wide sentiments turned negative amid increased fears of further rate hikes by the US Fed. This, combined with the inflation shocker in January could also result in the Reserve Bank of India announcing another rate hike even as the industry is hoping for a pause.

In the first half of trading on Wednesday, Nifty50 and Sensex declined by 0.9% on rate hike fears and rising geopolitical tensions.

Last week, the combined market capitalisation of the Adani group fell by ₹1.1 lakh crore. With today’s decline, the cumulative market capitalisation of the nine Adani group companies has fallen to ₹8.7 lakh crore. This is 39.6% of what it was on January 24, when the Hindenburg Research report was first published alleging stock manipulation and accounting fraud by the group. Since then, it has declined by ₹13.2 lakh crore.


Source: NSE, as at 10:30 a.m., February 22, 2023

Gautam Adani’s rank slips to 27th in the billionaire list

Gautam Adani’s wealth has also plummeted just as fast as the group’s market capitalisation. According to the Bloomberg Billionaires Index, Adani’s wealth currently stands at $46.1 billion, down from $119 billion on January 24.

This is a decline of nearly $73 billion in 28 days since the report was published, with Adani’s falling from the third richest person to the 27th on the list.

Adani group’s ‘comeback strategy’ fails to enthuse investors

Adani group’s ‘comeback strategy’ which involves repaying loans on or ahead of time has not had the effect it intended.

Earlier on Monday, Adani Ports & SEZ announced that it has repaid a ₹1,500 crore loan, and that it would repay loans amounting to ₹5,000 crore in FY24, and another $500 million bridge loan that is due in March this year.

The group earlier called off a plan to acquire DB Power for ₹7,017 crore, and also withdrew its ₹20,000 crore follow-on public offer (FPO).

According to a report by Bernstein Research, Adani Green can repay debt worth ₹22,000 crore that will fall due in FY25 by delaying some projects, avoiding bidding for new ones and divesting some assets.

External affairs minister hits back at Soros

On Saturday, external affairs minister S Jaishankar was the latest to hit back against noted businessman and philanthropist George Soros, calling him “old, rich, opinionated, and dangerous”.

Speaking at the Raisini@Sydney Dialogue on Saturday, Jaishankar said that Soros “still thinks that his views should determine how the entire world works.”

Last week, Soros said that the Adani group crisis will spur a “democratic revival in India”, adding that Prime Minister Narendra Modi will have to answer questions about the allegations against the group.

“Adani Enterprises tried to raise funds in the stock market, but he failed. (Gautam) Adani is accused of stock manipulation and his stock collapsed like a house of cards. Modi is silent on the subject, but he will have to answer questions from foreign investors and in parliament,” Soros said.

Hitting back at Soros, union minister Smriti Irani also said, “George Soros, who hedges bets against many countries, has now made known his ill intentions in the democratic processes of India. Those who support Soros need to know that democracy has prevailed in India and continues to do so.”

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