The combined equity market value of the Adani Group’s 10 companies slipped below $100 billion on Tuesday as the embattled conglomerate struggles to reassure investors following a scathing report by a US short seller.
The ports-to-power group has now lost about $138 billion in market capitalisation since January 24, when US-based Hindenburg Research published a report alleging accounting fraud and stock manipulation — accusations that the conglomerate has denied repeatedly.
Billionaire Gautam Adani and his eponymous companies have hired legal and communication teams, cut expenses and repaid debt as they seek to calm traders concerned about the group’s access to financing.
While the campaign brought the conglomerate’s dollar bonds back from distressed territory, the continued equity sell-off is an indication that more is needed.
“Capex [capital expenditure] and debt remain major concerns,” said Sameer Kalra, founder of Target Investing in Mumbai. “These can further weigh on valuations.”
The group tapped international bond buyers for more than $8 billion in recent years, while also turning to global banks for at least as much in foreign-currency loans, data compiled by Bloomberg shows.
Rating agencies have also revised the outlook for some companies, including Adani Green Energy and Adani Ports & Special Economic Zone.
Adani and his companies are now prioritising financial health over the aggressive debt-driven expansion spree of recent years.
The group’s focus has shifted to cash conservation, debt repayment and recovering pledged shares as it attempts to repair the damage caused by Hindenburg’s report.
Six out of the group’s ten stocks fell on Tuesday. Flagship Adani Enterprises closed 3.1 per cent lower while Adani Ports rose 0.6 per cent.
Adani Green, Adani Transmission and Adani Total Gas each fell by 5 per cent limit, while Adani Power rose by a similar magnitude.