Now Adani Group’s M-Cap Falls By Rs. 22,375 Crores
Fears of rate hikes by the US Fed are what fuel market volatility. The Reserve Bank of India may decide to announce another rate hike despite the industry's anticipation of a halt due to this and the January inflation bombshell.
Seven out of the nine group stocks declined as the decline in the Adani group stocks persisted. Four equities each hit their respective lower circuits, resulting in a 22,735 crore decrease in the group’s total market capitalization. The market capitalization of the Adani group experienced a fall of 60,691 crores, with the flagship Adani Enterprises alone recording a decline of 25,856 crores during the day.
On Thursday, the Sensex and Nifty50 indexes fluctuated wildly, ending the day down 0.2%. Fears of rate hikes by the US Fed are what fuel market volatility. The Reserve Bank of India may decide to announce another rate hike despite the industry’s anticipation of a halt due to this and the January inflation bombshell.
The Adani group’s total market value decreased by 1.1 lakh crore last week. The combined market capitalization of the nine Adani group companies has decreased by today’s dip to 8.36 lakh crore. Compared to January 24, when the Hindenburg Research report first claimed the organization had engaged in stock manipulation and accounting fraud, this figure has decreased by 38%. It has decreased by 13.62 lakh crore since then.
Gautam Adani drops to position 29 on the list of billionaires
The amount of money owned by Gautam Adani has decreased at the same rate as the group’s market value. Adani’s wealth is now $42.7 billion, down from $119 billion on January 24, according to the Bloomberg Billionaires Index. Adani dropped from third richest person to 29th, a reduction of $76.3 billion in the 29 days since the report’s publication.
Effects of the comeback plan of the Adani group
The “comeback approach” employed by the Adani Group, which entails making loan repayments on time or early, does not appear to have had the desired outcome. Adani Ports & SEZ said earlier that it had redeemed a loan for 1,500 crores and would repay loans totaling 5,000 crores in FY24, as well as another $500 million bridging loan that is due in March of this year.
The group also abandoned its plan to pay 7,017 crores for DB Power and withdrew its follow-on public offer at 20,000 crores (FPO). Adani Ports prepays another loan due in March by paying SBI Mutual Fund 1,000 crore as part of a recovery strategy. “We are no longer exposed to the Adani Group, according to a representative for SBI MF”.
Adani Ports has stated that it is considering retiring a debt of around 5,000 crores in the year beginning in April. This would lower the ratio of net debt to profits before interest, taxes, depreciation, and amortization from slightly over 3 times to approximately 2.5 times.
The apple-to-airport conglomerate is making an effort to calm down lenders and investors who were alarmed by reports of accounting fraud and stock manipulation, which have called into question the Adani Group’s financial stability. Adani Group has refuted accusations of impropriety. Sebi, the authority on capital markets, earlier this week informed the Supreme Court that it was investigating the claims made by the short seller as well as the market activity before and after the report.
Asia Index announced on Friday that as of February 22, it would remove Ambuja Cements Ltd. and ACC Ltd., the group’s two most recent cement purchases, from the S&P BSE 100 ESG Index.
Within the following 20 days, the company intends to fully prepay all loans secured by shares. The price of Adani Green shares fell 4.99% on Monday, roughly 70% since the US short seller revelation. Adani Electricity saw a 5% increase, while Adani Ports and the Special Economic Zone saw a 0.24% increase.
Adani Total Gas shares, which have been hammered the most by the report, ended down 5%, while shares of Adani Group’s main company Adani Enterprises, closed down 6.37%.
Damage to the market value of Adani group
A month after Hindenburg’s shocking revelation, Adani Group’s market value decreased by more than 12 lakh crore on Friday. The losses are considerably greater when compared to the peak level. The Adani Group held the top spot on stock exchanges on January 24, 2023, surpassing Ratan Tata’s TCS and Mukesh Ambani‘s Reliance with a market worth of over 19 lakh crore. Everyone wanted a taste of the conglomerate backed by Gautam Adani since it was the star of the show.
Nevertheless, on the same day, the bombshell disclosure from US-based short seller Hindenburg ignited a wildfire for Adani stocks. A month after the scathing report from the short seller, Adani’s shares are in ruins. Adani has experienced everything in a month, from the good old days to entering a phase of eye-watering losses. The majority of Adani stocks have dropped to new 1-year lows or consecutive lower lows.
The market capitalization of Adani securities on the BSE was around $7,15,986.97 crore by Friday’s close of business. With a market valuation of over $19.2 lakh crore on January 24, this represents a loss of more than $12 lakh crore.
The market capitalization of the Adani group has decreased by 70% from its high, according to Rohan Shah, head technical analyst at Stoxbox, earlier this week.
According to Shah, the market capitalization of the Adani Group peaked at almost $25 lakh crore.
By the end of February 2023, the market value of Adani shares will have fallen by more than 71% from this level. The losses are approximately $17.8 lakh crore in monetary terms.
Edited by Prakriti Arora