Investing in anything is not an easy task if you do not have clear ideas about the financial market and the shares held by different people. One of the most popular companies in India which has contributed towards the selling of shares is the Adani group.
However, recently the wealth of Gautam Adani has slipped from the list of billionaires across the world. He had about $50 billion under his ownership and this slipped down massively when he was accused of wrong governance and fraud. The entire fiasco led to a serious loss of Adani’s wealth and the mastermind behind this plan is Hindenburg Research, an activist short-seller.
Index Shows The Fall Of Adani
The real-time index has shown that Adani can be now considered a real-time billionaire who has a wealth under 50 billion dollars. He is the 25th man on the list now and is worth about 47.9 billion dollars. The questions which were brought on by Hindenburg were focused mostly on the financial disaster caused by the Adani group. It is related to the disclosures which were made by Adani and his cronies, both on domestic and overseas levels. The stir which had been caused in the international market due to this is a nearly devastating revelation. This has also led investors from different parts of the world to think about whether their investment and association with the Adani group has been wise or not. This consequently led to a serious fall in share prices.
The only bank which had extended support to the Adani group during this fiasco is the Bank of Baroda. They have extended their full support but no other group seems to be interested in providing the required infrastructure to the Adani group. It is an India-based public sector bank that has the chief executive officer lenient towards the Adani group. He has mentioned that the company will continue to provide support to the Adani group. The Indian markets were quite greatly affected by the claims of the Hindenburg Research team as well. They have not welcomed the decisions made on 24th January quite favourably. The stocks have seen a wild swing after the news was released and this led to several losses.
Reasons For Failing Prices
The share prices have continued to fall even through April. Several reasons have contributed to this. It has been reported by financial experts that the Adani Group has faced losses of over 108 billion dollars over the last few months and the business tycoon himself has lost over 48 billion dollars from his own belongings within a matter of a week. This has been quite instrumental in projecting the losses of the Adani group within the common people.
It has also been stated by the experts that about 72% of the shares are with the promoters and the fallout might not have such a great impact on the company in the longer term. However, the bloodbath in the shares which has been caused due to the slash of prices has led to the bad name of the organization. Adani Empire has seen a steep loss with the loss in the other enterprises as well.
The Story Of Hindenburg Research
Hindenburg Research is an activist short seller. They had released a report which had claimed that the Adani Group was manipulating the stocks for a long time. They have also accused the organizations which were under the close shelter of the Adani Group and were changing the stock prices from a distant location in Mauritius. The shell companies are related to the close relatives of the Adani Group and they have been accused of this fraud in quite large terms.
The timing of the report might have been a bit questionable because it had been published just a day before the FPO on 25th January. The claims made in this report have raised some very serious questions about the legal ideas of corporate governance. The stakeholders from the largest banks of India were also made food by the Adani Group according to this report. Even the largest insurance company in India, LIC has been asked to provide clarifications because of the exposure this organization has made in front of the Adani Group. Things are looking quite grim for Gautam Adani and his cronies at the moment.
Multiple reports have suggested that the Indian stock market is looking closely into the details which have been provided by the Hindenburg report. The Adani Group itself has claimed that the report is rubbish but it does not seem that the investors believe in this pitch. The overall market sentiment has been quite negative towards the Adani group. It is suspected that the overall political scenario of India which is pushing the rich to be richer and the poor to be poorer is also contributing to this negative sentiment of the organization. The combined market strength of the Adani Group has been slashed to half after the revelation has been made.
Calling Off The Historic FPO
The 20,000 crores INR FPO has been called off by Adani in light of this matter. The decision was made by the board in the interest of the investors who were in the market. The money which was owed by them would be returned. It seems that even this plan will be falling through due to the inefficiency of the board in several terms.
The historic FPO for the Indian market would have been a game changer in the present financial scenario and this led to further dissatisfaction among the investors. The Adani stocks are continuing to bleed as you are going through this very statement.
RBI has been looking into the claims which have been made by the Hindenburg Report. These will look into other shady areas which have been mentioned in several other reports as well. The banking sector remains as resilient as before and they are on constant vigil about the changes which might appear in the stocks in view of this matter.