The Adani Group faced another disastrous day on the market as the shares of its listed companies continued their downward spiral for the sixth consecutive session following the conglomerate’s decision to call off its fully subscribed Rs 20,000 crore follow-on-public offer (FPO) late on Wednesday.
In past six trading days, the total market capitalisation (m-cap) of nine Adani group companies has been eroded by $ 107 billion (Rs 8.65 lakh crore) or 45 per cent.
The market cap of nine Adani stocks has reduced from Rs 19.2 lakh crore before the short-seller’s attack, to Rs 10.5 lakh crore at the end of the trading session on February 2, 2023.
Adani Total Gas, the top loser among the pack, saw Rs 2.39 lakh crore of market cap erosion during the period, while Adani Enterprises (Rs 1.86 lakh crore), Adani Green Energy (Rs 1.39 lakh crore) and Adani Transmission’s (Rs 1.33 lakh crore) market-cap have all slipped by over Rs 1 lakh crore in the past six trading days.
Apart from this, state insurer Life Insurance Corporation of India (LIC) and State Bank of India (SBI), which have liberal investments in the group, have seen substantial market cap erosion of over Rs 1.2 lakh crore or $ 15 billion.
The withdrawal of the FPO has further raised concerns on how the Adani group will now look to service the over Rs 2.2 lakh crore debt on its books. Of which Adani Green Energy has the maximum amount of debt crossing Rs 52,000 crores followed by Adani Ports and Adani Power which have over 45,000 crores of debt.
Group chairman Gautam Adani said the rationale behind withdrawing Adani Enterprises FPO was to insulate investors from potential losses.
“After a fully subscribed FPO, the decision of its withdrawal would have surprised many. But considering the volatility of the market seen yesterday, the board strongly felt that it would not be morally correct to proceed with the FPO,” said Adani.