India’s Adani Enterprises (ADEL.NS) fell down to 15% on Friday. This came in after a pretty biting report published by a US short seller, which triggered chaos in the enterprise’s listed firms. This reports have casted severe doubts on how investors will now respond to company’s record secondary sale of nearly $2.45 billion.
Seven of the companies listed among the Adani conglomerate, and controlled by one of the richest men of the world- Gautam Adani have reported a combined loss of $43.5 billion in market capitalization since Wednesday. The US bonds of Adani firms have also fallen after Hindenburg Research showed concerns about debt levels and the use of tax havens in one of their January 24 report.
Although, Adani Enterprises Group has dismissed this report as baseless and has also stated that it will be taking a legal action against the New York-based firm.
“There were heavy positions in Adani Enterprises group (shares), the way they have risen in the last couple of years,” said Neeraj Dewan, director at Quantum Securities in New Delhi.
“This is a classic case of panic selling…,” he further said, pointing out that these concerns were also spreading to the Indian banks with an exposure to Adani Group’s debt.
(.NIFTYPSU), the index that tracks state-run banks was also down by 4.6%, while the principal Nifty Bank Index (.NSEBANK) had fallen 2.7%.
The CLSA estimated that Indian banks were exposed to about 40% of the 2 trillion Indian rupees ($24.53 billion) of the Adani Group debt in fiscal year to March 2022.
This stellar selloff has cast a shadow over Adani Enterprises’ secondary sale, which began on Friday.
