Adani group stocks have seen over USD 100 billion in value wiped out since Hindenburg Research released its damaging report. The tiny New York-based short selling firm has alleged financial and accounting fraud by the Indian ports-to-energy business conglomerate. The group, led by erstwhile Asia’s richest man Gautam Adani has denied all charges, calling the report malicious and full of lies.
Adani Group stocks tumble continues
Flagship Adani Enterprises shares tanked over 26 percent on Thursday, with most other group shares also falling for the sixth consecutive day. Adani Enterprises stock tumbled to a 52-week-low of Rs 1,513.90 in the day before settling at Rs 1,564.70 on the BSE. The combined wealth loss for 10 listed Adani Group firms has crossed Rs 8.76 lakh crore in 6 days.
On Thursday, Adani Transmission, Adani Green Energy and Adani Total Gas shares fell 10 percent while Adani Ports saw 6.13 percent slide, Adani Wilmar 5 percent, NDTV 4.99 percent and Adani Power lost 4.98 percent. Several stocks hit lower circuit limits during the morning trade. Cement stocks Ambuja Cements and ACC were up by 5.33 percent and 0.05 percent, respectively.
Threat to LIC's investments in Adani Group
The Adani group stock slump has threatened the value of investments made by the Life Insurance Corporation (LIC) and Indian public sector banks. LIC is heavily invested in Adani group stocks with sizable holding in almost all the 10 listed Adani Group companies. These include 9 percent in Adani Ports and Special Economic Zone, 3.7 percent in Adani Transmission, 1.3 percent in Adani Green Energy and 6 percent in Adani Total Gas Ltd.
Adani Group had decided to call off Adani Enterprises Ltd (AEL) share sale (FPO) late Wednesday after it was fully subscribed. In a statement, the group said it had decided to cancel the Follow-on Public Offering due to market volatility, deciding to return the money to investors. LIC was an anchor investor in the Rs 20,000-crore share sale and had invested about Rs 300 crore for 9,15,748 more shares.
RBI asks banks for details on their exposure to Adani Group
Meanwhile, the Reserve Bank of India (RBI) also sought details about banks’ exposures to the Adani Group on Thursday, banking sources were quoted as saying. On Wednesday, Swiss lender Credit Suisse stopped accepting bonds by Adani group companies as collateral for margin lending.
Uproar in Parliament
The issue also erupted in the Parliament as Opposition parties sought a debate and demanded a probe by a joint committee into the fraud-allegation-triggered rout in Adani group company stocks. Chaos forced adjournment of proceedings in both Lok Sabha and Rajya Sabha on Thursday.
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(Inputs from PTI)
