Gautam Adani’s troubled organization, which lost roughly USD 70 billion in value when a small New York short seller released a critical report, clung to an investment of USD 400 million by Abu Dhabi’s International Holding Co. in the share sale of its main company.
The gap between Adani and Mukesh Ambani, his rival, whom he overtook in April of last year, has shrunk to just USD 4 billion. Until the day before Hidenberg Research released the report, Adani was the third richest man in the world. On the release of the report on, raising concerns about debt levels, accounting fraud, alleged stock manipulation, and use of tax havens, Adani’s wealth has taken a tumble.
Firing back on the allegations, the corporate empire released a 413-page response to the Hindenberg report, in an effort to boost trust in the organization. However, the response was not well received and on Monday, the stock values of the majority of group companies continued to decline even as key dollar bonds hit new lows.
The Hindenberg organization rejected claims by Adani group that its report was “calculated attack” on India. It said that a “fraud” cannot be veiled by nationalism or a bloated response that did not address major allegations. Out of the 88 questions, the 413-page report did not address 62 questions, according to the US short seller.
Investors apparently had access to shares in Adani Enterprise Ltd.’s follow-on share offering of Rs 20,000 crore on the day Hindenburg published the study. Despite anchor investors investing over Rs 6,000 crore in the FPO on that day, the statistics available indicate that barely 3% of the shares on offer on BSE had been subscribed as of Monday evening.
As of the offer’s closing date on January 31, just roughly 4% of the FPO’s retail investor portion—which is also its largest component—was subscribed.
IHC said that it would contribute about $400 million to Adani Enterprises’ follow-on share sale and reiterated its belief in the company’s fundamentals despite the decrease in share value. Syed Basar Shueb, the CEO of the business, stated that “we see a huge opportunity for growth from a long-term viewpoint and additional value to our shareholders.”
The UAE’s national security adviser and the president’s brother, Sheikh Tahnoon Bin Zayed Al Nahyan, is in charge of IHC.
