Adani saga timeline: How a turbulent storm raged against ‘India’s richest man’

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Last week, US-based short seller Hindenburg Research accused the Adani group of “blatant” market manipulation and fraud, prompting a stock sell-off. Gautam Adani has always refuted the accusations and his company has referred to the information as “false”. A lot has happened since then. Here is a timeline of the events.

Table of Contents

January 24-31

Seven publicly traded Adani Group firms are 85% down on a fundamental basis due to extremely high valuations, according to a Jan. 24 Hindenburg Research study. The report alleged misuse of tax havens and raised concerns about debt levels.

The following day, the entities belonging to the Adani Group suffered a severe stock market correction that reduced their market capitalization by around $1 lakh crore.

Adani Group responded to Hindenburg Research saying the report was unsubstantiated, calling the allegations “unsubstantiated speculation.” However, Hindenburg emphasized that he remained true to his report.

Adani Group went on to say that this was not simply an unwarranted attack on a specific company, but a calculated attack on India.” Hindenburg said in his response that rather than address any of the substantive points, Adani “feed a nationalist narrative” that seeks to combine the “meteoric rise and wealth of its president, Gautam Adani, with the success of India itself.”

Companies in the Adani Group continued to experience losses as trading resumed, taking the two-day drop in market capitalization to $4 lakh crore.

While a 1% underwriting is seen on Adani Enterprises FPO on day one, Abu Dhabi’s International Holding contributed $400 million to FPO in support of Adani. On January 31, the FPO was fully subscribed.

February 1-3

On February 1, Credit Suisse’s private bank stopped margin lending on Adani Bonds. The private banking arm of the Swiss lender assigned a zero loan value for the notes sold by Adani Ports and Special Economic Zone, Adani Green Energy and Adani Electricity Mumbai.

On the same day, Adani Group shares lost $86 billion, forcing the Securities and Exchange Board of India (SEBI) to launch an investigation. Later that night, Adani Group canceled the FPO of Adani Enterprises.

Gautam Adani, once “the richest man in India”, has been dropped from the list of the world’s 10 richest. Mukesh Ambani overtook his rival and broke into the top 10 list.

On February 2, it was revealed that the State Bank of India (SBI) had donated $2.6 billion to companies in the Adani conglomerate. SBI’s exposure included $200 million from its overseas units, it was reported.

The younger brother of former British Prime Minister Boris Johnson, Lord Jo Johnson, has stepped down as a non-executive director of UK-based investment firm Elara Capital, connected to the now-discontinued Adani Enterprises FPO. Gautam Adani’s three mega projects in Mumbai were analysed.

On February 3, maintaining the rating, S&P Global Ratings changed the outlook on Adani Ports and Adani Electricity to negative from stable. As of this day, three Adani group companies, including Adani Enterprises, came under the framework of short-term Additional Surveillance Measures (ASM) from the National Stock Exchange (NSE).

LIC disclosed that it held a 4.23% stake in Adani Enterprises, while it held a 9.14% stake in Adani Ports and a 5.96% stake in Adani Total Gas.

Finance Minister Nirmala Sitharaman reassured investors by calling India a “very well regulated financial market.” “Investor confidence, which existed before, will continue even now. As much as it is talked about globally, it’s not going to be indicative of how well financial markets are governed,” she said.

More than $110 billion was removed from 10 companies, including Adani Group-related flagship Adani Enterprises. Finance Secretary TV Somanathan called the drop in Adani Group shares a “storm in a cup of tea” from a macroeconomic perspective.

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