Gautam Adani loses Asia’s richest crown as share value surges to $84 billion

BENGALURU, Feb 1 (Reuters) – Indian tycoon Gautam Adani lost his title as Asia’s richest person on Wednesday as losses at his conglomerate’s biggest companies deepened to $84 billion, according to a short seller report.

A Hindenburg Research report last week alleged that the group had abused offshore tax havens and rigged shares, as well as concerns about high debt and the valuations of seven Adani listed companies.

It has stepped up scrutiny of the conglomerate, with an Australian regulator saying on Wednesday it will review the allegations to see if further investigations are warranted.

The Adani group has denied Hindenburg’s allegations, saying the short seller’s story of stock manipulation has “no basis” and stems from a ignorance of Indian law. It has always made the necessary regulatory disclosures, it added.

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Wednesday’s stocks drop saw Gautam Adani, with an estimated net worth of $84.1 billion, slip to 10th on the Forbes rich list, just below rival Reliance Industries Ltd (RELI.NS) chairman Mukesh Ambani. who has an estimated net worth of $84.4 billion. Before the Hindenburg Report, Adani had ranked 3rd.

The worsening defeat comes as the group managed to rally support from investors to get a stock sale for flagship Adani Enterprises through the line on Tuesday.

“Yesterday there was a slight bounce after the stock sale was implemented after it seemed unlikely at one point, but now the soft market sentiment following the bombastic Hindenburg report has resurfaced,” said Ambareesh Baliga, a Mumbai-based independent market analyst.

“The fact that stocks have fallen despite Adani’s refutation clearly shows some damage to investor sentiment. It will take a while to stabilize,” Baliga added.

Adani Enterprises (ADEL.NS), often dubbed the incubator of Adani companies, plunged 20% on Wednesday, taking its losses to nearly $15 billion since the Hindenburg report. Adani Power (ADAN.NS) is down 5%, while Adani Total Gas (ADAG.NS) is down 10%, falling around its daily price limit.

Adani Transmission (ADAI.NS) is down 6% and Adani Ports and Special Economic Zone (APSE.NS) is down 15%.

Adani Total Gas, a joint venture between French energy giant Total (TTEF.PA) and Adani Group, was the biggest victim of the short seller report, losing around $27 billion.

The data also showed that foreign investors have sold Indian stocks worth a net $1.5 billion since the Hindenburg report — the largest outflow in four consecutive days since Sept. 30.

The headaches for the Adani group are expected to continue for some time.

India’s market regulator, which has been investigating deals at the conglomerate, has also said it will include Hindenburg’s report in its own preliminary investigation.

The state-run Life Insurance Corporation (LIC) (LIFI.NS) said Monday it would seek clarifications from Adanis management on the short seller report. However, the insurance giant was a key investor in the Adani Enterprises stock sale.

Hindenburg said in its report it had shorted US bonds and non-India-traded Adani Group derivatives.

Reporting by Chris Thomas in Bengaluru and Aditi Shah in New Delhi; Additional reporting by Bharath Rajeshwaran and Aditya Kalra; Editing by Edwina Gibbs

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