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    Colossal loss! Investors in Adani stocks lose Rs 10 lakh crore in 7 days as market cap halves

    Story outline

    • In the last seven trading sessions since the release of the report by the American short-seller, the market capitalisation of all 10 Adani Group stocks is down by over 51% to Rs 9.31 lakh crore.
    • Troubles for the 60-year-old Ahmedabad-based tycoon, who has been trying to control the damage without results, has been increasing with each passing day.
    • Global bankers Credit Suisse and Citigroup have stopped accepting Adani bonds as collateral for margin loans.
    How Hindenburg left Rs 10 lakh crore-hole in pockets of Adani bulls
    NEW DELHI: In the aftermath of an unprecedented attack on billionaire Gautam Adani's vast empire by Hindenburg, the market value of all 10 Adani stocks have halved with investors sitting with a colossal loss of Rs 10 lakh crore.

    In the last seven trading sessions since the release of the report by the American short-seller, the market capitalisation of all 10 Adani Group stocks is down by over 51% to Rs 9.31 lakh crore.

    During the day, Adani Enterprises was the top loser in Adani's world as th Nifty50 stock was locked in 30% lower circuit at Rs 1095.30. The stock is down over 74% from its 52-week high. The company's Rs 20,000 crore FPO, which was withdrawn earlier in the week, was priced at Rs 3,112-Rs 3,276.

    Among other Adani stocks, Adani Transmission and Adani Green Energy were both locked in their respective 10% lower circuit limits. On the other hand, Adani Power, Adani Total Gas, Adani Wilmar and NDTV were locked in 5% lower circuits amid unending selling pressure.

    To safeguard investors from the sharp volatility in stocks of Adani Group companies, NSE has moved Adani Enterprises, Adani Ports and Special Economic Zone, and Ambuja Cements under the short-term additional surveillance measure (ASM) framework. Traders are now required to pay 100% upfront margin even for intraday trades.

    Mounting Troubles
    Troubles for the 60-year-old Ahmedabad-based tycoon, who has been trying to control the damage without results, has been increasing with each passing day.

    Dow Jones Sustainability Indices said they will remove Adani Enterprises from its ESG index following fraud-related allegations while CRISIL Ratings said it is keeping all its outstanding ratings on the group entities under “continuous surveillance”.

    Global bankers Credit Suisse and Citigroup have stopped accepting Adani bonds as collateral for margin loans.

    Analysts say that market participants seem to be pricing in the fact the previously assessed growth prospects of the Adani Group stand challenged and the probability of any upside is at least significantly deferred if not completely erased in the medium term.

    "While the overvaluation of the Adani stocks was not a surprise, the detailed allegations of fraud and market manipulation are pretty horrendous. There have been rumours about the same on social media last year, but the regulators never took a stand, and the allegations died down. The detailed investigations by Hindenburg are a revelation and would help the Indian market by clearing up the ambiguous corporate governance issues of Adani companies," said Sonam Srivastava, Founder at Wright Research.

    To boost confidence of investors, Adani is said to be in taks with creditors to prepay some loans backed by pledged shares.

    The Adani Group has said its balance sheet was “very healthy” and its history of servicing debt was “impeccable.".

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)



    ( Originally published on Feb 03, 2023 )
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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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