Gautam Adani’s business loses $50 billion in market value after short seller report

Gautam Adani's business loses $50 billion in market value after short seller report
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New Delhi

The value of by Gautama Adani The business empire has collapsed by more than $50 billion this week since Hindenburg Research, an American company that makes money from short sales, published a searing report accusing him of fraud.

from india The Adani Group has denounced Hindenburg’s allegations as “baseless” and “malicious”, and is considering legal action. But the sharp sell-off in shares, which began on Wednesday, accelerated on Friday after US hedge fund billionaire Bill Ackman said he found the short seller’s report credible.

Hindenburg Research published research on the Adani conglomerate late on Tuesday, accusing him of “blatant stock manipulation and accounting fraud scheme over the course of decades.” He said that he had taken a short position in the Adani Group companies, which means that he would benefit from a fall in their value.

The shares of those companies, some of which had risen more than 500% in recent years, it plunged when the Indian stock market opened on Wednesday. The rout resumed on Friday when trading resumed after a market holiday on Thursday.

Shares of Adani Transmission, Adani Total Gas and Adani Green Energy, three of the group’s seven listed companies, were each down 20% on Friday, while shares of Adani Enterprises, the conglomerate’s flagship, fell. 18%. Losses on Friday wiped out nearly $39 billion in market value.

According to the Bloomberg Billionaires Index, Adani remains the richest man in Asia with a personal fortune valued at $113 billion, $30 billion more than Indian businessman Mukesh Ambani. Friday’s losses will narrow that gap.

Hindenburg said Thursday that he fully supported his report and believed that any legal action would be “without merit.”

“If Adani is serious, he should also file a lawsuit in the US, where we operate. We have a long list of documents that we would require in a legal discovery process,” the short seller he said in a post on Twitter.

Hindenburg is not the first research firm to raise concerns about the finances of Adani’s sprawling empire, which has borrowed $30 billion to establish itself in industries ranging from logistics to mining, and is growing aggressively in sectors such as media, data centers, airports. and cement.

Ackman intervened in the debate Twitter on Thursday, saying it found Hindenburg’s research “highly credible and extremely well researched.”

“We are not short or long-term invested in any of Adani’s companies … nor have we conducted our own independent research,” Ackman added.

Hindenburg’s claims come at a delicate time. Adani Enterprises aims to raise 200 billion rupees ($2.5 billion) by issuing new shares this month. The offer will close on Tuesday.

Adani, who dropped out of college and became a self-made industrialist, is the fourth richest man in the world, ahead of Bill Gates and Warren Buffet. He is also seen as a close ally of India’s Prime Minister Narendra Modi.

The 60-year-old tycoon founded the Adani group more than 30 years ago.

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