Gautam Adani’s wealth swells by $5.6 billion on relief rally

A stocks rally in firms owned by Gautam Adani added $5.6 billion to his net worth last week after India's top court concluded hearings in a lawsuit where the markets regulator is probing wide-ranging allegations of corporate malfeasance against the conglomerate.

The founder of the Adani Group, whose stocks were battered earlier this year after a bombshell shortseller report in January, now ranks 20th on the Bloomberg Billionaires Index with a $65.8 billion fortune. Most of this gain was on Tuesday — the first trading day last week after India's Supreme Court reserved its verdict on the probe saying it won't take scathing media reports on the conglomerate as the "gospel truth." The final court ruling is awaited.

Investors, however, seem to have taken court's observations as a positive cue, stoking a relief rally in Adani's group of companies. The ports-to-power conglomerate added $12 billion to its market value on Tuesday, making it the best day for the group since Hindenburg Research's Jan. 24 report that accused it of accounting fraud and stock price manipulation. The Adani Group has repeatedly denied these allegations.

"The general view is that the worst is behind and now we will not hear about Hindenburg," said Abhay Agarwal, founder and portfolio manager at Mumbai-based Piper Serica Advisors.

The Supreme Court had asked the local market regulator in March to probe the US shortseller's accusations against the Adani Group that triggered a stock rout so severe that it wiped out $153 billion off its market value at one point. A six-member expert panel appointed by the court said in its interim report in May that it saw no regulatory failure or signs of price manipulation in Adani stocks.

While the court's verdict is still awaited and the outcome of the regulatory probe is not known — signaling the continuing overhang on the conglomerate — the investors seem to be sanguine about Adani Group's prospects. The conglomerate has in recent months secured a $3.5 billion refinancing, funding from a US government-backed financier for a Sri Lanka port project as well as investments from GQG Partners and Qatar Investment Authority. 

Last week's gain only partially makes up for the wealth erosion that Adani has seen this year. A first-generation entrepreneur who started as a diamond trader in Mumbai in the 1980s and was the second-richest person briefly in 2022, the tycoon has lost $55 billion — the biggest wealth loss for any tycoon this year.