Adani Enterprises shares plunge on the stock market, Gautam Adani drops in the Forbes rankings

The tumble continued Wednesday for Adani Enterprises of the Indian Gautam Adani, with a fall of nearly 30% on the Bombay Stock Exchange and the exit of the magnate from the top 10 of the great world fortunes established by Forbes. The title of the flagship of the Gautam Adani conglomerate fell 28.45% to 2,128.70 rupees (26 dollars), at the end of the session.

According to the Bloomberg agency, this plunge is linked to information that the banking group Credit Suisse has stopped accepting bonds from the Adani conglomerate as collateral for margin loans granted to its private banking clients. Asked by AFP, Credit Suisse declined to comment.

Adani’s personal fortune has shrunk by more than $40 billion in the meantime, according to Forbes real-time rankings, knocking him out of the top 10 richest people in the world. He is now behind his compatriot Mukesh Ambani. Gautam Adani is no longer the richest man in Asia.

After the fifth straight day of losses, the stock market rout has wiped about $92 billion off the value of the conglomerate’s listed companies since last week, according to Bloomberg News. The title Adani Total Gas, in which the French giant TotalEnergies holds 37.4%, fell again by 10% and trading was again suspended. The new sharp drop in Adani Enterprises stock comes on the heels of a successful oversubscribed follow-on public offering (FPO) in the final hours before expiry.

Magnates to the rescue

FPO underwriters included tycoons Sajjan Jindal and Sunil Mittal, Bloomberg News reported, citing sources who spoke on condition of anonymity. The investments come from their personal funds and do not relate to the listed companies they run, such as JSW Steel Ltd. and Bharti Airtel Ltd, those sources said, according to Bloomberg.

Sajjan Jindal has invested around $30 million, one source added. However, the amount of Mr. Mittal’s investment was not disclosed. The losses by the Gautam Adani conglomerate follow the publication last week by the American investment firm Hindenburg Research of a report on a “shameless manipulation of stocks and a decades-long accounting fraud scheme“.

The conglomerate reacted on Sunday by claiming to be the victim of an attack “maliciousaimed at smearing its reputation and dubbed Hindenburg Research the “madoff from manhattan», in reference to the shady American businessman Bernard Madoff. “This is not just an unwarranted attack on any specific company, but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of india“, he replied in a long statement.

Gautam Adani, 60, has seen his empire grow at breakneck speed, with Adani Enterprises’ share price soaring more than 1,000% in the past five years. The tycoon made a fortune in ports and commodity trading. He now heads India’s third-largest conglomerate with interests ranging from coal mining and edible oils, to airports and the media.

Political proximity

His critics believe that the proximity of Gautam Adani and Prime Minister Narendra Modi, both from Gujarat state, helped the tycoon win deals and avoid proper regulatory scrutiny. Narendra Modi has not made public comments since the publication of the Hindenburg report, which analysts say has damaged India’s image among foreign investors.

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India’s opposition Congress party called this week for a “serious investigationby the central bank and regulator on Adani’s businesses following accusations from Hindenburg Research. “With all its postures on black money, has the Modi government chosen to turn a blind eye to the illicit activities of its favorite business group?asked Congress. Opposition MPs, mockingly, chanted the name “Adani! Adani!on Wednesday, when Finance Minister Nirmala Sitharaman mentioned ports during a budget speech to parliament.

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