Adani's market losses top $100 bn as shelved FPO spooks investors
Delhi/Mumbai, February 2
Adani Group’s market losses swelled to more than $100 billion and sparking worries about their potential systemic impact on Thursday a day after its flagship company abandoned a $2.5-billion stock offering.
Fundamentals strong
The fundamentals of our company are strong. Our balance sheet is healthy and assets, robust. We will continue to focus on long-term value creation and growth will be managed by internal accruals. Gautam Adani, Industrialist
Citi stops loans against securities
- Citigroup has stopped extending margin loans to its clients against securities of Adani Group and cut the loan-to-value ratio to zero
- Adani Enterprises’ shares plunged by over 26% on Thursday, trading at its lowest since March 2022
- Other group companies also lost further ground, with 10% losses at Adani Total Gas, Adani Green Energy and Adani Transmission and Adani Ports and Special Economic Zone shedding 5%
The withdrawal of Adani Enterprises’ share sale caps a dramatic setback for founder Gautam Adani, the school dropout-turned-billionaire whose fortunes rose rapidly in recent years but have dwindled over the past one week after US-based short-seller Hindenburg published a critical research report.
Cancelling the share sale saw Adani stocks plunge, Opposition lawmakers call for a wider probe and the central bank spring into action to check on banks’ exposure.
Citigroup’s wealth unit has stopped extending margin loans to its clients against securities of Adani Group and cut the loan-to-value ratio for credit against Adani securities to zero on Thursday, a source said.
Adani late on Wednesday called off the share sale as a stocks rout sparked by short-seller Hindenburg’s criticisms intensified, despite the offer being fully subscribed.
Since Hindenburg’s report on January 24, group companies have lost nearly half their combined market value. — Reuters
