MUMBAI, January 27 (Reuters) – Shares of Indian Adani Enterprises (ADEL.NS) It fell 15% on Friday as a harsh report from a US short seller triggered a rout in the holding’s listed companies and cast investors doubt on how the company would react to the company’s record $2.45 billion in secondary sales.
The seven listed companies of the Adani holding, controlled by one of the world’s richest men, Gautam Adani, have lost a total of $43.5 billion in market capitalization since Wednesday. Report on 24 debt levels and use of tax havens.
Adani Group dismissed the report as unfounded and said it was considering whether to take legal action against the New York-based firm.
“There were heavy positions in the Adani group (shares) as it has risen over the past few years,” said Neeraj Dewan, director of Quantum Securities in New Delhi.
“This is a classic case of panic selling,” he said, adding that concerns have spread to Indian banks as the Adani group is exposed to debt.
Index that tracks state banks (.NIFTYPSU) the main Nifty Bank index fell 4.6% (.NSEBANK) fell 2.7%.
CLSA estimates that Indian banks were exposed to approximately 40% of the 2 trillion Indian rupees ($24.53 billion) of Adani group debt in the fiscal year to March 2022.
The stunning sale overshadowed Adani Enterprises’ secondary sale, which began on Friday. Anchor part of the sale I saw the participation From investors, including the Abu Dhabi Investment Authority on Wednesday.
The firm has set a floor price of Rs 3,112 ($38.22) and a ceiling of Rs 3,276 per share. But at noon on Friday, the stock fell to Rs 2,875 – well below the lower end of the quote.
As of 0700 GMT, investors, mostly retail investors, have bid for approximately 200,000 shares, according to BSE stock market data. The tender for individual investors will end on January 1st. 31.
Shares of other listed Adani companies also fell with Adani Transmission Ltd. (ADAI.NS) Adani Total Gas (ADAG.NS)Adani Green Energy (ADNA.NS) and Adani Ports (APSE.NS) each sinking 20%.
The Hindenburg report said the Adani Group’s key companies had “significant debt”, putting the holding in a “precarious financial position”, and that “very high valuations” had pushed the share prices of seven publicly traded Adani companies as high as $85. % beyond true value.
Billionaire US investor Bill Ackman said on Thursday He said he found the Hindenburg report “highly credible and extremely well researched”.
Hindenburg said that he is holding short positions in Adani through US-traded bonds and non-India-traded derivatives, which means he predicts prices will fall.
Adani Group has repeatedly faced and denied concerns about debt levels. In a presentation titled “Myths of the Open Seller” on Thursday, he defended himself by saying that de-leverage by backers or key shareholders was “in a phase of high growth”.
In a client note, Jefferies said it shared details of Adani Group’s debt and leverage levels and said it “does not see any significant risk arising from the Indian banking sector.”
Jefferies said Adani Group’s consolidated gross debt is 1.9 trillion rupees ($23.34 billion).
Adani stated that her debt is at a manageable level and no investors voiced their concerns.
Adani Enterprises’ net profit for the period ended September 2 doubled to INR 9 billion ($110.31 million) on September 30, 2022, while its total revenue nearly tripled to INR 795 billion on September 30, 2022, according to its Share sales prospectus. .
The prospectus showed that as of September 2022, the company’s total liabilities stood at 869 billion rupees ($10.64 billion).
The Adani conglomerate is diversifying its business interests and last year the cement firm acquired ACC. (ACC.NS) and Ambuja Cements (ABUJ.NS) from Holcim in Switzerland (HOLN.S) 10.5 billion dollars. ACC fell 15% on Friday, while Ambuja fell as much as 25%.
report by M. Sriram and Chris Thomas; Editing: Aditya Kalra, Christopher Cushing and Kim Coghill
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