on Feb 28, 2023)MUMBAI: Gautam Adani is now placed at the 38th spot in the Forbes rich list, a far cry from the third position just before the Hindenburg report was published, which impacted his group’s stock prices. Currently, Adani’s net worth is estimated at $33.4 billion, according to Forbes’ real-time tracker, which is an erosion of over $85 billion from $119 billion before the report was published on January 24.
However, Bloomberg Billionaires Index, another widely followed global rich list, places Adani at the 30th position with a net worth of nearly $40 billion. A significant part of his net worth stems from his holding in the Adani Group, which he chairs. In a little over one month since Hindenburg published the report that has, among others, questioned the group accounting, the conglomerate’s combined net worth had eroded by nearly $150 billion, BSE data showed.
Mukesh Ambani, with a net worth of $84.3 billion, is at the eighth place on the Forbes rich list. Ambani chairs Reliance Industries, which has interests in petrochemicals, oil & gas, telecom and retail.
In its January 24 report, Hindenburg alleged accounting fraud, stock price manipulation and improper use of offshore shell entities in tax havens by Adani, triggering a massive fall in his companies’ share prices. Adani has denied any wrongdoing.
Hindenburg’s predictions about Adani stocks come true? Group’s net worth dips below $44 billion
In its January 24 report on the Adani Group, US-based short-seller Hindenburg Research had said that the seven stocks within the group (that carry the Adani name) were about 85% overvalued. Almost a month to the day since that damning report made global headlines, one of the group’s stocks, Adani Total Gas, is within striking distance of achieving that valuation. On Wednesday, the stock on BSE closed at Rs 835, down nearly 79% from its January 24 close. And if one considers the fall in the Ahmedabad-based conglomerate’s stock prices since their respective 52-week highs, two more are nearing the 85% mark: Adani Green Energy and Adani Transmission. The stock prices of all the 10 Adani Group companies have been going south since January 25. Adani Total Gas’s stock price closed at Rs 835, its 19th consecutive session of closing at lower circuit in last 20 sessions, starting January 25, a day after Hindenburg accused the group of accounting fraud, stock price manipulation and corporate malfeasance. In its report, Hindenburg said based solely on financials taken directly from Adani companies, the group’s stocks appear to be highly overvalued. “Infrastructure firms are generally relatively sleepy, low growth, low multiple enterprises, yet valuation metrics of the Adani listed companies are comparable to the frothiest of high-growth tech companies. On a blended basis, compared to industry peers, we see 85%+ downside purely on fundamentals. “Since January 24, Adani Total Gas, a joint venture between Adani and France’s Total Energies, has seen its market value dip by Rs 3.35 lakh crore. From Rs 4.3 lakh crore, its market cap is now below Rs 1 lakh crore mark, at Rs 91,829 crore, BSE data collated by TOI showed.
Most of Adani’s fortune stems from infrastructure, where he has presence in ports, airports, roads and rails. Following the Hindenburg report, the 60-year-old first-generation entrepreneur cancelled his flagship Adani Enterprises‘s Rs 20,000-crore follow-on public offering (FPO), abandoned a Rs 7,017-crore buyout of DB Power by group arm Adani Power and the situation has snowballed into a political issue in the country.
Since January 25, the business tycoon, who started as a commodities trader in 1988, has been repairing the damage caused by the Hindenburg report by turning his focus on preserving cash, retiring liabilities, recovering pledged shares and scaling down capital expenditure plans.
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