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Massive erosion of wealth as Hindenburg effect continues to pummel Adani stocks Adani stocks

Massive erosion of wealth as Hindenburg effect continues to pummel Adani stocks

India Blooms News Service | @indiablooms | 25 Feb 2023, 12:54 am

Mumbai: In just a month, the portfolios of Adani investors have been affected by a report from Hindenburg Research, causing a Rs 12 lakh crore loss, ET reported.

The value of all 10 Adani stocks has decreased by 62%, with some falling as much as 84% from their highest level in the past 52 weeks, bringing the total value down to Rs 7.32 lakh crore, said the report.

The massive rout in Adani stocks has wiped out a large chunk of Adani Group Chairman’s wealth.

From being the world’s 3rd richest man on January 25, when US short-seller Hindenburg Research released the report, Gautam Adani has slipped to the 29th position in the global ranking list.

As seen from the 52-week-high level Adani Green Energy stock lost 84% of its market value, Adani Transmission lost 83%, and Adani Total Gas shares slipped 81%, according to the report.

The group’s flagship company Adani Enterprises shed 67% since its 52-week high while the conglomerate’s biggest earner Adani Ports also slid 43%.

The Supreme Court has urged the Indian government to establish a group of experts with a former judge at the helm to improve regulatory measures and safeguard the investments of Indian investors from market instability caused by the recent decline in Adani Group's stocks.

Despite Adani Group's attempts to calm investor concerns by paying off some loans and highlighting the stability of their business models and balance sheet, investors remain unconvinced.

According to the report, the Adani Group's crisis has had a ripple effect on market sentiment, with the Nifty index falling more than 3% in the past month.

Despite optimistic reports from analysts and brokerages about the overall health of India's banking system and its limited exposure to Adani Group's companies, the Nifty Bank index has experienced a decline of more than 6% in the past month.

Meanwhile, state-owned insurance behemoth LIC, which is the largest domestic investor in Adani Group, is on the verge of making a notional loss of Rs 30,000 crore in its equity investment in the conglomerate, the report said.