(Bloomberg) – The total equity market value of the 10 Adani Group companies fell below $100 billion on Tuesday, as the struggling group struggled to reassure investors after a scathing report by a US short seller.
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The Transformation to Power Group has now lost more than $136 billion in market capitalization since January 24, when US-based research firm Hindenburg Research released a report alleging accounting fraud. and securities manipulation — allegations that the Adani Group has repeatedly denied.
Billionaire Gautam Adani and his firms have hired media and legal teams, cut costs and pay down debt as they seek to assuage traders concerned about the group’s access to finance. While the campaign has brought corporate dollar bonds back from miserable territory, the continued sell-off in equities is a sign that more is needed.
“Capex and debt are still big concerns,” said Sameer Kalra, founder of Target Investing in Mumbai. “These could have more of an impact on valuation.”
The group has tapped international bond buyers in the amount of more than $8 billion in recent years, while turning to global banks to borrow at least in foreign currencies, data compiled by Bloomberg shows. Rating agencies have also revised their outlooks for several companies, including Adani Green Energy Ltd. and Adani Ports & Special Economic Zone Ltd.
Adani and his companies are now prioritizing financial health over the aggressive expansion driven by debt in recent years. The group’s focus has shifted to preserving cash, repaying debt, and recovering mortgage shares as the team tries to repair the damage caused by Hindenburg’s report.
Shares of the Group traded mixed on Tuesday, with flagship Adani Enterprises Ltd. Trading was little changed at 11:04 am in Mumbai. Adani Green, Adani Transmission Ltd. and Adani Total Gas Ltd. are all limited to 5% off, while Adani Power Ltd. increased by a similar amount and Adani Ports traded about 2% higher.
(Updated with stock move in last paragraph)
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