The combined market value of Adani Group shares of 10 firms slipped below $100 billion on Tuesday following a scathing report by a US short seller, as reported by news agency Bloomberg.
According to the report, the conglomerate has now lost more than $136 billion in market capitalisation since January 24, when US-based Hindenburg Research published a report alleging accounting fraud and stock manipulation — accusations that Adani Group has denied repeatedly.
Gautam Adani and his companies have hired legal and communication teams, cut expenses and repaid debt as they seek to calm traders concerned about the group’s access to financing. While the campaign brought the conglomerate’s dollar bonds back from distressed territory, the continued equity selloff is an indication that more is needed.
“Capex and debt remain major concerns,” said Sameer Kalra, founder of Target Investing in Mumbai. “These can further weigh on valuations,” he added.
The group tapped international bond buyers for more than $8 billion in recent years, while also turning to global banks for at least as much in foreign-currency loans, data compiled by Bloomberg show. Rating agencies have also revised the outlook for some companies, including Adani Green Energy Ltd. and Adani Ports & Special Economic Zone Ltd.
Adani and his companies are now prioritising financial health over aggressive debt-fuelled expansion spree of recent years. The group’s focus has shifted to cash conservation, debt repayment, and recovering pledged shares as it attempts to repair the damage caused by Hindenburg’s report.
Meanwhile, Adani Ports and Special Economic Zone, a group firm of Adani Group, plans to prepay Rs 1,000 crore ($120.8 million) in commercial papers maturing in March, said a company spokesperson.
According to Reuters, Adani Ports has commercial papers worth Rs 2,000 crore due to mature in March, data from information service provider Prime Database showed. It had cash and cash equivalents of Rs 6,257 crore as of December 31, per its latest quarterly report.