Adani selloff drags group's market value to under $100b

The combined equity market value of Adani Group's 10 companies slipped below $100 billion on Tuesday, as the embattled conglomerate struggles to reassure investors following a scathing report by a US short seller.

The ports-to-power group has now lost more than $136 billion in market capitalisation since 24 January, when US-based Hindenburg Research published a report alleging accounting fraud and stock manipulation — accusations that Adani Group has denied repeatedly.

Billionaire Gautam Adani and his companies have hired legal and communication teams, cut expenses and repaid debt as they seek to calm traders concerned about the group's access to financing. While the campaign brought the conglomerate's dollar bonds back from distressed territory, the continued equity selloff is an indication that more is needed. 

Infographic: Bloomberg

"Capex and debt remain major concerns," said Sameer Kalra, founder of Target Investing in Mumbai. "These can further weigh on valuations."

The group tapped international bond buyers for more than $8 billion in recent years, while also turning to global banks for at least as much in foreign-currency loans, data compiled by Bloomberg show. Rating agencies have also revised the outlook for some companies, including Adani Green Energy Ltd and Adani Ports & Special Economic Zone Ltd.

Adani and his companies are now prioritizing financial health over aggressive debt-fuelled expansion spree of recent years. The group's focus has shifted to cash conservation, debt repayment, and recovering pledged shares as it attempts to repair the damage caused by Hindenburg's report. 

Group's stocks were trading mixed on Tuesday, with flagship Adani Enterprises Ltd trading little changed as of 11:04am in Mumbai. Adani Green, Adani Transmission Ltd and Adani Total Gas Ltd were each down by 5% limit, while Adani Power Ltd rose by a similar magnitude and Adani Ports traded about 2% higher.