Adani Group Shares Slide After Hindenburg Alleges ‘Largest Con In Corporate History’

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Shares of India’s Adani Group companies slid sharply on Wednesday morning after activist investment firm Hindenburg Research disclosed a short position against the company while accusing the companies owned by the world’s third richest person, Gautam Adani, of fraud.

Key Facts

In a report disclosing its short position, Hindenburg alleged that the Adani group of companies had “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.”

Shares in Adani Enterprises—the Adani Group’s flagship company—were down more than 3% to Rs 3,333 ($40.77) on Monday afternoon while Adani ports slumped by more than 6.5% to Rs 711.

Other Adani Group-listed companies also fared poorly with food company Adani Wilmar stock dropping nearly 5%, Adani Power by 4.7%, Adani Transmission by 5.19%, Adani Total Gas by 4.77% and Adani Green Energy by 3.55.

Shares of Indian news broadcaster New Delhi Television (NDTV)—which was recently acquired by Adani in a hostile takeover—were also down 5% while cement companies Ambuja and ACC, which were also recently acquired by Adani, fell 8% and 6.6% respectively.

Hindenburg says it has taken its short positions “through U.S.-traded bonds and non-Indian-traded derivative instruments.”

The timing of the disclosure is likely a major blow for the conglomerate as its flagship firm Adani Enterprises is set to carry out a Rs 200 billion (USD 2.45 billion) follow-on public offering on Friday.

Forbes Valuation

Wednesday’s selloff, after Hindenburg’s revelation, have led to a 5% or $6.4 billion drop in Gautam Adani fortune. According to our estimates, Adani’s total net worth now stands at $120 billion, making him the world’s third richest person. If the selloff continues Adani may have to cede the third place to Jeff Bezos whose net worth we estimate to be $119.5 billion.

This is a developing story.

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