Adani loses Asia’s richest crown, shares rout deepens to $84 billion

BENGALURU, Feb 1 (Reuters) – Shares in Indian tycoon Gautam Adhani’s companies fell again on Wednesday as his holdings in his companies rose to $84 billion and he lost his title as Asia’s richest man after a U.S. short seller report. person

Share losses on Wednesday saw Adani slip to 15th place on the Forbes rich list, with an estimated net worth of $76.8 billion, below Reliance Industries Ltd chairman Mukesh Ambani. (RELI.NS) He is ranked ninth with a net worth of $83.6 billion.

Prior to the critical report by US short seller Hindenburg, Adani was ranked third.

The losses mark a dramatic setback for Adani, a dropout-turned-billionaire whose business interests stretch from ports and airports to mining and cement. Now, the president is struggling to stabilize his businesses and protect his reputation.

It was seen by some as a sign of investor confidence, a day after parent company Adani Enterprises managed to rally support from investors for a $2.5 billion stake sale on Tuesday.

A report by Hindenburg Research last week accused the Adani Group of improper use of offshore tax havens and stock manipulation. This raised concerns about high debt and valuations of seven listed Adani companies.

The group has denied the allegations, saying the short-seller’s narrative of stock manipulation has “no basis” and stems from ignorance of Indian law. It has always made necessary regulatory disclosures, it added.

Adani Enterprises Shares (ADEL.NS), often described as an incubator of Adani businesses, fell 30% on Wednesday. Adani Power (ADAN.NS) Adani Total Gas fell 5% (ADAG.NS) It fell 10%, breaking its daily price range.

Adani Transmission (ADAI.NS) 6% and Adani Ports and Special Economic Zone decreased (APSE.NS) 20% decrease.

Adani Total Gas is a joint venture with France’s Total (TTEF.PA)Short sellers were the biggest hit on the report, losing about $27 billion.

“After looking unlikely at one point, there was a slight bounce yesterday after the stock sell-off, but now after the bombshell Hindenburg report the weak market sentiment is back,” said Mumbai-based independent market analyst Ambarish Balika.

“With the shares falling even after Adani’s denial, it clearly shows some damage in investor sentiment. It will take some time to stabilize,” Balika added.

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Underscoring the tension in some quarters, Bloomberg reported on Wednesday that Credit Suisse (CSGN.S) Adani stopped accepting bonds of group companies as collateral for margin loans to its private banking clients.

Devan Choksey, managing director of KRChoksey Shares and Securities, said this was a big factor in the stock’s declines on Wednesday.

Credit Suisse had no immediate comment.

An investigation into the group has been stepped up, and an Australian regulator said on Wednesday it would review Hindenburg’s allegations to see if further investigations were needed.

The data also showed that foreign investors sold a net $1.5 billion worth of Indian stocks after the Hindenburg report — the biggest outflow in four consecutive days since September 30.

Adani Group is expected to continue to have headaches for some time.

India’s market regulator, which is probing the group’s deals, has said it will Collaboration Hindenburg’s report to its own initial inquiry.

Government run Life Insurance Corporation (LIC) (LIFI.NS)said On Monday it will seek clarification from Adani’s management on the short-seller report. However, insurer Adani Enterprises was the main investor in the share sale.

Hindenburg said in its report that Adani Group has narrowed its US-bond and non-Indian trading derivatives.

Reporting by Chris Thomas in Bangalore and Aditi Shah in New Delhi; Additional reporting by Bharat Rajeshwaran and Aditya Kalra; Editing by Edwina Gibbs and Mark Potter

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