How Asia’s wealthiest male lost his crown in simply a couple of days

Adani stocks continued to see sharp losses throughout Wednesday’s trading session in Mumbai– although the corporation handled to manage a win a day previously.

Adani Enterprises got a vote of self-confidence from financiers on Tuesday, when its $2.5 billion follow-on public offering (FPO) was totally subscribed on the last day.

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The sharp decreases show deteriorated financier belief from a report launched by short-selling companyHindenburg TheJan 24 report implicated Adani Group business of “brazen stock manipulation and accounting fraud.”

On Wednesday, Adani Group’s shares fell after days of unpredictable trading.

Shares of Adani Enterprises plunged by 28% onWednesday Adani Port and Special Economic Zone dropped 19%, Adani Green Energy fell more than 5%, Adani Total Gas lost 10% while Adani Transmission closed 2.8% lower.

The stock thrashing that followed the statement totaled up to $84 billion, Reuters reported.

According to Forbes, Gautam Adani, the creator and chairman of the group, has actually lost his status as Asia’s wealthiest male to Mukesh Ambani, the chairman of Reliance Industries.

Hindenburg, which stated it has actually taken a brief position in Adani Group, stands to gain from the decreasing worth of those stocks.

Adani’s fight with the short-seller company has actually put the group’s direct exposure to Wall Street– totaling up to almost $9 billion, according to JPMorgan– under the spotlight.

In simply one week, Indian billionaire Gautam Adani saw more than $34 billion rubbed out his net worth, according to the Bloomberg Billionaires Index.

Here’s a timeline of the major events that led to this.

Jan. 25: Before India’s market opened on Wednesday Asia time, Hindenburg Research announced its short position on Adani Group companies through U.S. traded bonds and non-Indian traded derivatives. Adani-affiliated stocks saw sharp losses during the trading day. Gautam Adani’s net worth fell by $6 billion overnight.

Jan. 26: India’s market was closed for a holiday.

Jan. 27: Adani Enterprises proceeded with opening subscriptions for its follow-on public offering of $2.5 billion despite a continued stock sell-off seen in group companies’ stocks. The billionaire’s net worth fell by another $20.3 billion to $92.7 billion.

Jan. 28-29: Adani Group released a lengthy 413-page response over the weekend, warning of legal action against Hindenburg and claimed the accusations raised against the Indian firm was a “calculated attack on India” and its institutions.

Hindenburg shot back and slammed Adani Group’s response as “bloated,” claiming it “ignores every key allegation” raised.

Jan. 30: In an interview with CNBC-TV18, Adani Enterprises Group CFO Jugeshinder Singh defended the group. He told the CNBC affiliate that the value of Adani Enterprises has not changed “simply because” of share price volatility. Shares of the group’s companies continued to see more losses. Adani’s net worth falls by another $8 billion to $84.5 billion

Jan. 31: Adani Enterprises’ $2.5 billion share sale was fully subscribed on the final day of subscription, despite analysts’ concerns it may fall through.

The 60-year self-made Indian billionaire expanded his empire through deals and the support of Indian Prime Minister Narendra Modi, according to Forbes.

He became a billionaire in 2008 after launching his commodities export firm and surpassed Bill Gates on the Bloomberg Billionaires Index in July 2022. It came even as a number of tech billionaires lost a combined $315 billion last year, according to Forbes.

The Adani conglomerate owns India’s biggest airport operator and the nation’s largest port operator. The group recently sought a hostile takeover of Indian media group NDTV. In a filing, the media company said the move was “carried out without any consent” from its founders.

Despite his net worth seeing sharp falls from Hindenburg’s short-seller report, Adani tweeted a photo with Israel Prime Minister Benjamin Netanyahu on Tuesday.

According to Reuters, the Indian corporation has actually finished its $1.15 billion takeover of Israel’s Port of Haifa.

Hindenburg’s claims have actually raised concerns about Adani Group’s growth, primarily driven by financial obligation, and the lax guidelines that permitted acquisitions to continue.

However, economic experts that CNBC talked to shaken off any long-lasting spillover results.

“I think the events with Adani Group are seen in isolation,” Herald van der Linde, head of equity method, for Asia Pacific at HSBC informed CNBC. “The Indian equity story remains one of the best across the region. Growth is visible and more predictable than elsewhere in the region.”

“In the near term, sentiment and flows may be adversely impacted, but this should not have a lasting impact over the medium-term,” stated Sonal Varma, Nomura’s primary financial expert for India and Asia beyond Japan informed CNBC

“The key drivers of India’s medium-term growth prospects remain intact, corporate and banking balance sheets are much stronger, reforms are focused on enabling investments and raising productivity, and as a large market, India will benefit from the ongoing supply chain diversification,” she included.

Asked if financiers ought to be purchasing Adani stocks at the minute, Smart Investor’s David Kuo, stated candidly: “It is better to stay out of trouble than to get out of trouble later.”

“What Hindenburg is alluding to is that there is a problem with the debt. And it may not reflect itself in the share price, but there may be a debt problem,” Kuo stated on CNBC’s “Street Signs Asia.”

“It does have a lot of bonds outside of India – what happens if those bonds were to deteriorate in value, it would have an impact on the company,” he stated.

“Whether you believe the Hindenburg report or not, I think something needs to happen. Something needs to be clarified before investors start jumping in,” he included.

— CNBC’s Seema Mody added to this report.