Adani Group shares hit $100 billion on Thursday after the conglomerate’s flagship called off a $2.4 billion share sale and said it was “morally unacceptable” to proceed amid stock destruction .
All 10 shares controlled by Adani Group fell in early Mumbai trading. Adani Enterprises, Adani Transmission and Adani Ports extended losses by 10 percent, deepening a sell-off sparked by a short-seller attack on the conglomerate last week.
In a video address released just before the market open on Thursday, founder Gautam Adani dismissed concerns about his empire’s financial health, saying the cancellation of the share sale “will have no impact on our existing businesses and future plans.”
He said that “given yesterday’s market volatility, the board firmly believed that it would be morally unfair to proceed with the follow-up offering,” adding that “once the market stabilizes, we will review our capital markets strategy.” “. .
Wednesday’s decision to withdraw the share sale and refund investors came after Adani Enterprises’ shares fell to Rs.2,179.75 ($27), well below the deal’s floor price of Rs.3,112.
Adani Group shares have now lost more than Rs 8.4 trillion since short seller Hindenburg Research last Wednesday accused the conglomerate of using offshore companies in tax havens to inflate the share prices of its listed companies, allowing them to take on more debt record and “putting the whole group in dire financial straits”. The Adani Group rejects the allegations.
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Adani made repeated efforts to reassure investors ahead of the stock sale, including releasing a 413-page response to the short seller’s allegations. It has also recruited some of India’s leading tycoons to help launch the sequel offering.
Anchor investors, including Abu Dhabi-based International Holding Company and London-listed Jupiter Asset Management, had already committed to buy 30 percent of the offering before the public share sale began on Friday. IHC on Monday pledged to invest $400 million in the sale.
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According to one person with direct knowledge of the situation, the sell-off has prompted some financial groups, including Citigroup’s wealth division, to stop accepting Adani securities as collateral for margin loans.
The Adani Group also on Thursday denied “market rumours” that shares in its cement makers Ambuja Cements and ACC had been pledged as collateral as part of the acquisition financing and that the group was under pressure to cover losses due to share price declines.
Adani Group’s debt was also hit by selling, with a dollar bond from Adani Ports due 2024 falling 20 cents to just under $0.70 against the dollar on Wednesday, while another bond from Adani due 2024 Green Energy fell further by about 10 cents to $0.67 USD.