The 10 listed Adani Group firms have faced a combined erosion of over ₹8.76 lakh crore in 6 days.
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Even after scraping ₹20,000 crore FPO, the shares of Adani Group companies plunged further with the flagship Adani Enterprises dropping by 26% while stocks of other listed entities continued on free fall mode on Thursday.
Except Ambuja Cement, all other stocks of its listed entities witnessed rout declining from 5-18% on Thursday.
The market has not paid heed to Ahmedabad based billionaire Gautam Adani’s reassurance, who in a video message said, “For me, the interest of my investors is paramount and everything is secondary.”
At the closing hours on Thursday, Adani conglomerate’s market losses have exceeded $100 billion since January 24th when the U.S. based short seller Hindenburg Research published a damning report alleging “accounting fraud and stock market manipulation” and raising concerns about “substantial debt.”
In an unprecedented move on Wednesday late night, the board of Adani Enterprises announced calling off its fully subscribed Follow on Public Offer (FPO) of ₹20,000 crore, which had managed to sail through with generous support from the fellow tycoons, as family offices of top corporates pumped in hundreds of crore to rescue to share deal.
“Given the unprecedented situation and the current market volatility the company aims to protect the interest of its investing community by returning the FPO proceeds and withdraws the completed transaction,” the Adani Group said in a statement issued after the board meeting.
Also read: How much has the Adani group lost since the Hindenburg report?
On Thursday before the opening of the market, in a video statement, Mr. Adani, who is facing the worst crisis of his life in the aftermath of the sensational investigation report prepared by the short seller Hindenburg, sought to calm investors contending that the FPO was withdrawn to insulate the investors from potential loss as the crisis is deepening.
“This decision will not have any impact on our existing operations and future plans. We will continue to focus on timely execution and delivery of projects. The fundamentals of our company are strong. Our balance sheet is healthy and assets, robust,” he added in the statement.
Top sources in the group told The Hindu that the group entities have solid cash generating assets like ports, power plants, cement factories and airports and their combined value far exceed the total debt of the group.
“We have 12 ports in east and west coasts and handle around 25% of the cargo in the country. Similarly, the group’s thermal plants in Gujarat, Maharashtra, Rajasthan and Madhya Pradesh have almost 14,000 MW installed capacity,” a top source said.
The group in its statement on Wednesday also underlined that “Our balance sheet is very healthy with strong cashflows and secure assets, and we have an impeccable track record of servicing our debt.”
“We have never defaulted in any repayment,” the source cited above said.
On Thursday, Citigroup’s wealth arm has also followed the Credit Suisse and stopped extending margin loans to its clients against securities of embattled Adani Group firms.
Moreover, the swift falling in the shares of Adani Group companies has prompted the central bank RBI to ask local banks for the details of their exposure to the Adani conglomerate. The shares of of state run SBI and LIC were also hammered after the media reports about their exposure in the various companies belonging to the Adani conglomerate.