Gautam Adani’s Companies Continue to Experience Stock Decline:
The past week has seen a continued stock slump in Gautam Adani’s companies, with stocks extending their fall as the crisis continues to spread. The downturn was triggered by a report from US-based short seller Hindenburg, causing the Adani stocks to all fall in early trading, resulting in their market cap dropping below ₹10 lakh crore, or more than half of their combined value since January 24.
Adani Enterprises Shares Witness Biggest Intra-Day Fall:
The flagship firm Adani Enterprises experienced its biggest ever intra-day fall as the stock dropped approximately 25% after the S&P Dow Jones Indices announced that it would remove shares of Adani Enterprises from widely used sustainability indices, effective February 7. This would make the shares less appealing to sustainability-minded funds.
Adani Ports and Special Economic Zone was down 14%, Adani Transmission and Adani Green Energy both slumped 10%, and Adani Total Gas, a joint venture with France’s TotalEnergies SE, fell 5%.
Strict Regulations Put in Place:
The stock fall intensified as the National Stock Exchange (NSE) placed additional surveillance measures (ASM) framework on three Adani group stocks – Adani Enterprises, Adani Ports, and Ambuja Cements on Thursday, making them subject to more stringent rules.
Hindenburg Research Accuses Adani Group of Market Manipulation:
Last week, Hindenburg Research accused the Adani group of “brazen” market manipulation and accounting fraud, claiming that a web of Adani-family controlled offshore shell entities in tax havens were used to facilitate corruption, money laundering, and taxpayer theft. The group has called the claims “baseless”.
Adani Group Cancels ₹20,000 Crore FPO and Chairman Comments:
The Adani Group cancelled its ₹20,000 crore follow-on public offer (FPO) on Wednesday, a day after it was fully subscribed. Chairman Gautam Adani stated on Thursday that it would not be “morally correct” to go ahead with the share sale in the current market conditions. Adani said, “Our balance sheet is healthy and assets, robust. Our EBIDTA levels & cash flows have been very strong & we’ve an impeccable track record of fulfilling our debt obligations. We’ll continue to focus on long term value creation & growth will be managed by internal accruals.”
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