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More Than $100 Billion Wiped Off Market Cap Of India's Adani Group Following A Botched Share Sale

More Than $100 Billion Wiped Off Market Cap Of India's Adani Group Following A Botched Share Sale
Shares of India's Adani group continued the downward slide on Thursday following the Gautam Adani-led conglomerate deciding to shelve a $2.5 billion share sale because of a volatile market. By the end of Thursday, the group witnessed the wiping off of a total of $100 billion from its market capitalization since the short-seller attack on the stocks last week. 
The cancellation of Adani Enterprises' share sale is a significant setback for Adani, the school dropout-turned-billionaire whose fortunes have risen rapidly in recent years in tandem with the stock values of his businesses.
Despite the fact that the offer was fully subscribed on Tuesday, Adani called off the share sale on Wednesday as a stock market rout sparked by U.S. short-seller Hindenburg's criticisms deepened. Adani has also lost his title as Asia's richest man as a result of the short-attack. seller's
Adani Enterprises, the group's flagship company, fell 10% after opening higher on Thursday. Adani Ports and Special Economic Zone, Adani Total Gas, Adani Green Energy, and Adani Transmission all fell 10%, while Adani Power and Adani Wilmar fell 5% each.
The stock market crash and cancellation of the share sale are an embarrassment for the billionaire, who has forged partnerships with foreign players in his global expansion of businesses ranging from ports to mining to cement.
According to Forbes, Adani is now the world's 16th richest person, down from third last week.
According to government and banking sources, India's central bank has requested information about local banks' exposure to the Adani group of companies. CLSA estimates that Indian banks were exposed to roughly 40% of Adani group debt totaling 2 trillion rupees ($24.53 billion) in the fiscal year ending March 2022.
Earlier this week, the Adani group stated that it had complete investor support, but investor confidence has dwindled in recent days.
Citigroup's wealth division has stopped extending margin loans to its clients against Adani Group securities, according to a source with direct knowledge of the situation on Thursday.
There was no comment on the issue from Citi.
The Adani group was accused of stock manipulation and improper use of offshore tax havens in Hindenburg's report last week. It also expressed concern about Adani's high debt and the valuations of seven publicly traded Adani companies.
The Adani group has denied the allegations, claiming that the short-claim seller's of stock manipulation has "no basis" and stems from a lack of knowledge of Indian law. The company also stated that it has always made the required regulatory disclosures.
Even though the stock's market price was lower than the issue's offer price after the Hindenburg report, Adani was able to secure share sale subscriptions on Tuesday. However, stocks fell again on Wednesday.
Adani announced late Wednesday that he was canceling the share sale due to the company's financial difficulties "The stock price has changed throughout the day. Given these extraordinary circumstances, the company's board of directors determined that proceeding with the issue would be morally wrong."

Christopher J. Mitchell

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