Gautam Adani’s firm loses $50 billion in market value after report on short sellers

New Delhi

The value of Gautam Adani’s business empire has plummeted by more than $50 billion this week since Hindenburg Research, a US firm that makes money from short selling, released a scathing report l accusing of fraud.

India’s Adani Group has denounced Hindenburg’s allegations as «baseless» and «malicious», and is considering legal action. But the sharp sell-off in stocks, 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 an investigation of the Adani conglomerate late Tuesday, accusing him of «brazen stock manipulation and accounting fraud over the decades.» He said he took a short position in Adani Group companies, meaning he would benefit from a decline in their value.

Shares of these companies – some of which had jumped more than 500% in recent years – plunged when the Indian stock market opened on Wednesday. The rout resumed on Friday when trading resumed after a public holiday Thursday.

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

Adani is still Asia’s richest man with a personal fortune worth $113 billion, which is $30 billion more than fellow Indian entrepreneur Mukesh Ambani, according to the Bloomberg Billionaires Index. Friday’s losses will reduce this gap.

Hindenburg said on Thursday he stood by his report fully and believed any legal action would be «without merit».

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

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

Ackman weighed in on the debate over Twitter Thursday, saying he found the Hindenburg investigation «highly credible and extremely well documented.»

«We are not long or short term invested in any of the Adani companies…nor have we done our own independent research,» Ackman added.

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

A self-taught college and industrial dropout, Adani is the fourth richest man in the world, ahead of Bill Gates and Warren Buffet. He is also considered a close ally of Indian Prime Minister Narendra Modi.

The 60-year-old tycoon founded the Adani Group over 30 years ago.

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