Adani Group Gets Stunned by Report, $2.5 Billion Share Sale Called Off
Posted on 02/03/2023
Indian billionaire Gautam Adani moved to reassure investors of the financial status of his empire as the paper value of his holdings plummets. On February 1, 2023, Adani Enterprises Limited disclosed they would return US$ 2.5 billion raised from the follow-on share sale to investors, which included sovereign wealth fund investors like the Abu Dhabi Investment Authority (ADIA). The Adani group of companies had rapidly expanded from 2015 using debt to grow market share in industries ranging from ports, media, and renewable energy.
Shares of Adani Enterprises fallen dramatically over the past week. This was after a report from U.S. short-seller Hindenburg Research was released. Hindenburg Research accuses the Adani Group of fraud and stock market manipulation. Gautam Adani has vehemently denied wrongdoing. In early January 2023, Adani was the world’s third richest man with wealth tied mostly in listed stock. Hindenburg Research stood by its report and reiterated the Adani Group had “failed to specifically answer 62 of our 88 questions.”
Companies across the Adani Group of companies have seen a huge sell-off. In total, the group’s market value losses streamed past US$ 108 billion by Friday (February 3, 2023) close. Adani Enterprises has suffered the largest loss among the wider group’s many listed companies, shedding more than 60% of its market capitalization, or more than US$ 30 billion — between the short-seller report’s publication on January 24, 2023 and the close of February 2, 2023 trade. To make matters worse, Credit Suisse Group AG ceased accepting bonds of Adani’s group of companies as collateral for margin loans to its private banking clients.
Top 20 Shareholders in Adani Enterprises Limited
| Shareholders | Ownership Percentage | Shares in Thousands |
|---|---|---|
| Adani SB Family | 55.27 | 630,034.70 |
| Adani Tradeline Private Limited | 8.73 | 99,491.70 |
| Life Insurance Corporation of India | 4 | 45,815.00 |
| Green Enterprises Investment Holding | 3.5 | 40,191.00 |
| Flourishing Trade and Investment Ltd. (based in Mauritius) | 3 | 33,937.70 |
| Afro Asia Trade and Investments Ltd. (based in Mauritius) | 2.7 | 30,249.70 |
| Worldwide Emerging Market Holding Ltd (based in Mauritius) | 2.7 | 30,249.70 |
| HSZ (Hong Kong) – HSZ Group | 1.7 | 19,295.40 |
| Elara Capital plc | 1.7 | 19,190.10 |
| M.M. Warburg Bank (Switzerland) | 1.3 | 14,290.90 |
| The Vanguard Group, Inc. | 0.7 | 8,497.00 |
| SBI Funds Management Private (State Bank of India) | 0.6 | 7,195.00 |
| BlackRock Fund Advisors (BlackRock Inc.) | 0.6 | 6,454.20 |
| Spitze Trade and Investment Ltd. (based in Mauritius) | 0.3 | 3,986.00 |
| UTI Asset Management | 0.2 | 2,237.50 |
| BlackRock Advisors (UK) (BlackRock Inc.) | 0.2 | 1,901.30 |
| Kotak Mahindra Asset Management | 0.1 | 1,281.80 |
| Geode Capital Management | 0.1 | 1,114.00 |
| Dimensional Fund Advisors | 0.1 | 831.1 |
| Nippon Life India Asset Management | 0.1 | 737.3 |
Source: Public shareholder data, February 3, 2023.