Home » Adani Group: the sell-off continues despite the closure of the capital increase. About $70 billion up in smoke

Adani Group: the sell-off continues despite the closure of the capital increase. About $70 billion up in smoke

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The collapse of the shares continues unabated Adani Groupthe Indian conglomerate caught in a stock market cyclone after being targeted by the American short seller Hindenburg Research, which last week accused the Indian billionaire “of setting up the biggest scam in corporate history” through an articulated and “cheeky share price manipulation and accounting fraud”.

The stock market crash

Following the hedge fund reportall Adani Group companies rapidly collapsed, currently reaching one loss of more than 70 billion dollars in just over 5 trading sessions, with the shares of the flagship Adani Enterprises who lost more than 14% since early last week.
But not only that, the titles involved (Adani Green Energy, Adani Transmission e Adani Total Gas among others) have all lost about 20% of their value, the maximum value allowed by the regulation of the Mumbai Stock Exchange before halting trading due to excessive downtrend.

As we see from the graphs taken from Bloomberg, the Adani Enterprises stock, the conglomerate of the Indian Group, come on all-time highs reached above 4,000 Inr and even lost more than 30% before bouncing and currently trading close to Inr 3,000 up 2%.

Performance of the Adani Enterprises share on the Stock Exchange in the last year
Performance of Adani Enterprises stock in recent weeks

An attack on India

Over the weekend, the Adani Group rejected the accusations made by the US hedge fund, entrusting the answer to a report of over 400 pageswhich however did not convince investors, nor did it curb the collapse of the group’s share prices.

In the report in question, the Adani group states that the allegations brought forward by Hindenburg Research “represented not just a deliberate attack on a specific company, but a calculated attack on Indiathe independence, integrity and quality of Indian institutions as well as India’s history of growth and ambitions”.

Here, from this point of view, it would seem that the Indian tycoon wants to shift attention from a purely business issue to an India defense issue. But if Adani defines the American fund to be the “Madoffs of Manhattan” and speaks of a “calculated attack on India”, for his part the US investor states that “fraud cannot be clouded by nationalism”.

In any case, the Indian Group promises an appeal to the courts against Hindenburg, defining the allegations as a “intentional and reckless attempt by a foreign entity to mislead the investment community”.

Capital increase

The clash in question is taking place in a rather delicate moment for the Indian group which is grappling with a capital increase of Adani Enterprises for a value of 2.5 billion dollarsi, one of the largest fundraising campaigns run by an Indian company. The subscription period ended today and surprisingly, despite the speculative fund report, the Indian billionaire succeeded in his intent, thus managing to place all the shares offered.

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In this sense, more than 51 million shares were sold to the public; while another 18.3 million shares were purchased by large investors including: Jupiter Asset Management, BNP Paribas, Societe Generale and Goldman Sachs.

Investment from the UAE

But not only that, in yesterday’s session the shares of Adani Enterprises closed with an increase of almost 3% after receiving an important investment from an Abu Dhabi company.
In particular, we are talking about International Holding Company (IHC) di Abu Dhabia big company linked to the royal familywhich has announced it will invest 400 million dollars in the Adani Group, representing his second major investment in the group.

IHC is the largest publicly traded company in the UAE and its funding in Indian Group accounts for approximately 16% of Adani’s fundraising offering.

“Our interest in Adani Group is driven by our trust and belief in the fundamentals of Adani Enterprises Ltd; let’s see a strong growth potential in a long-term perspective and added value for our shareholders“said the chief executive officer of IHC, Syed Basar Shueb.

Adani leaves the podium of the richest in the world

Prior to the Hindenburg Research report, Adani he was the third richest man in the world, but now he slipped to 11th placesince according to the Billionaire Index di Bloomberghis net worth shrank by more than $30 billion to about $84 billion.

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