A total of 10 Adani group stocks have lost Rs 8.76 lakh crore ($107 billion) in market capitalisation in a span of mere six trading sessions. That, at a rupee-dollar exchange rate of 81.80 stood near $110-111 billion annual GDPs (World Bank) of Ethiopia or Kenya. Group stock Adani Total Gas has lost over $29 billion in the 6-day rout; the group’s flagship eroded $26.17 billion in market value, in the turmoil.
As per Bloomberg Billionaire index, Adani’s personal wealth stood at $119 billion as of January 24, the day Hindenburg Research came out with its report, down from a high of $150 billion it hit last year in September. Forbes on Thursday estimated Adani’s fortunes at $64.6 billion. If one takes the value, that’s a fall of $85 billion in Adani’s personal wealth. That equals the annual GDP of Bulgaria!
Adani Green Energy (down $16.95 billion) and Adani Transmission (down $16.36 billion) are two other Adani group stocks that eroded huge investor wealth in value terms. Adani Ports & SEZ ($7.89 billion), Ambuja Cements ($3.55 billion) Adani Wilmar ($2.4 billion) and ACC ($1.13 billion) are some other Adani group stocks eroding value significantly over the last couple of sessions.
The weakness in Adani group stocks was triggered by a research report by Hindenburg Research which alleged the group was into money laundering and stock manipulation. Despite, Adani group’s denial, the group shares have continued to slide. Add to that are concerns over the group’s debt levels.
Vinit Bolinjkar, Head of Research at Ventura Securities said Adani’s Group level net debt stood at Rs 1.60 lakh crore while its annual Ebitda stood at Rs 57,000 crore. If the Adani group does not take additional debt for expansion purposes in the next two quarters, debt at the group level would be pretty much under control, he noted. Bolinjkar said the fallout of Hindenburg Research, coupled with negative news flows and reactions from institutions, could lead to high volatility in Adani Group stocks in the near term.
Adanis are not very leveraged in most of their businesses, except maybe Adani Green, and that operation cash flows should be enough to service the debt obligations, said Abhishek Basumallick, chief equity advisor at Intelsense Capital, who felt valuations at most Adani Group stocks were high.
Also read: Adani Group stocks continue to crash: Hindenburg, Credit Suisse & other reasons
Also read: Adani Wilmar stock hits lower circuit; down 26% in six sessions
