Adani stocks fall up to 20%; Adani Ent, Green Energy, Transmission hit lower circuit

Shares of billionaire Gautam Adani-controlled Adani group companies extended losing streak on Friday, with most shares hitting their lower circuit limit after the National Stock Exchange (NSE) put three firms -- Adani Enterprises, Adani Ports, and Ambuja Cements -- under the additional surveillance measure (ASM) framework from February 3, 2023. Adding to the woes, Adani Enterprises, the flagship company of the group, will be removed from the Dow Jones Sustainability Indices, prior to open on February 7. 

The Adani group shares have seen sharp selling pressure in the last one week after the U.S.-based investment firm Hindenburg Research alleged that key listed firms have taken on substantial debt, including pledging shares for loans. The conglomerate also released a 413-page response to Hindenburg’s allegation which failed to ease investors’ nerves.

Following Hindenburg report, Swiss Finance giant Credit Suisse and Citigroup Inc.’s wealth arm announced they stopped accepting bonds from Gautam Adani-controlled companies as collateral for margin loans to its private banking clients.  

These slew of developments triggered sell-off in group shares, which prompted the management to withdraw its ₹20,000-crore follow-on public offer (FPO) even after its successful completion.

All Adani group companies were trading in negative terrain in the opening deals on Thursday. Adani Enterprises was the biggest loser with a 20% loss, followed by Adani Green Energy and Adani Transmission, which were locked in 10% lower circuit limit. Similarly, Adani Power, Adani Total Gas, Adani Wilmar fell 5% each, while Adani Port & SEZ declined 6.5%. Shares of ACC and Ambuja Cements also witnessed selling pressure falling up to 3% in early trade.

Since January 24, the total market cap of Adani Group has fallen from ₹19.21 lakh crore to ₹10.41 lakh crore on February 2, down by ₹8.76 lakh crore or 45.68%. On Thursday, group companies lost ₹1.32 lakh crore in market capatilisation, with the five group stocks closing in lower circuit even as the chairman Gautam Adani tried to soothe nerves of jittery investors.

Since the launch of the FPO, Adani Enterprises has lost ₹2.14 lakh crore, while Adani Power, Adani Wilmar, Adani Port, Adani Total Gas, Adani Transmission, Adani Green, ACC, and Ambuja lost ₹28,020 crore, ₹19,716 crore, ₹64,000 crore, ₹2.39 lakh crore, ₹1.33 lakh crore, ₹1.38 lakh crore, ₹9,217 crore and ₹29,010 crore, respectively.  

In a fresh development, Gautam Adani is reportedly in talks with creditors to prepay some loans backed by pledged shares to restore investors’ confidence about group companies’ financial health. On Thursday, the management issued a statement refuting media reports that shares of ACC and Ambuja Cements were pledged by promoters as a part of the acquisition financing. “We would like to clarify that none of the shares of Ambuja or ACC have been pledged by Promoters. The Promoters have only provided non-disposal undertaking and accordingly, there is no requirement of providing any top-up of shares of Ambuja and ACC or cash top up under the acquisition financing raised last year,” the Adani group said in a statement.