Seven listed companies controlled by Gautam Adani, the world's third richest person, lost a combined $11 billion after Hindenburg Research shorted the stocks citing alleged taxation irregularities, substantial debt and inflated valuations.
Investors Lose Billions
The US-based Hindenburg Research said it was holding short positions in Adani companies -- which means it expects the companies' stocks to decline. The report triggered a sell-off in Adani-controlled stocks, resulting in the loss of investor wealth running to several billions overnight.
The Adani Group dismissed the allegations and underscored that Hindenburg Research did not make an effort to reach out to the conglomerate over its concerns.
Jugeshinder Singh, the Chief Financial Officer of Adani Group, said the Hindenburg report was a "malicious combination of selective misinformation and stale, baseless and discredited allegations."
Report's Timing Slammed
"The Group has always been in compliance with all laws ...The timing of the report's publication clearly betrays a brazen, mala fide intention to undermine the Adani Group's reputation with the principal objective of damaging the upcoming follow-on Public Offering from Adani Enterprises," the statement added.
Adani Enterprises, which is the holding company of Gautam Adani, is slated to launch the country's biggest public secondary share offering on will on January 27. The aim is to raise as much as $2.5 billion through the offering.
One of the charges made by the research group is that some listed Adani companies had substantial debt that puts the group on a precarious financial footing. The group dismissed the claims saying no one has raised concerns about the group's debt. "Nobody has raised debt concerns to us. No single investor has," CFO Singh said, according to Reuters.
Adani Group is a sprawling conglomerate that controls huge companies engaged in varied businesses ranging from energy to ports and from utilities, transport and logistics to airports. The Group is a diversified organisation with market cap of over $166.5 billion comprising seven publicly listed companies.
The Group is headquartered in Ahmedabad in the industrialized western Indian state of Gujarat. The Group's website says it employs 23,000 people.
Gautam Adani is a first-generation businessman and has a net worth of $120 billion, according to the Bloomberg Billionaires Index.