A sell-off in Adani Group shares deepened on Friday, taking losses this week to more than $29bn since short-seller reports targeted the Indian conglomerate led by one of the world’s richest men.
The loss comes as Gautam Adani, the group’s billionaire founder, went ahead with a Rs200bn ($2.4bn) stake sale, intended to show the company could attract global investors.
Shares in Adani Enterprises, the group’s flagship listed company undertaking an equity offering, fell as much as 6.2 percent in morning trade in Mumbai to Rs3,180.
The intraday drop in shares of the flagship company reflected a 3 percent discount to the Rs3,276 per share price paid by anchor investors who had participated in the deal, including London-listed Jupiter Asset Management, BNP Paribas, Société Générale and Goldman. Sachs.
Losses were sharper among the other six listed Adani Group companies, with Adani Green Energy down 15.6 percent, while Adani Transmission fell 19.2 percent.
The fall brought the total loss of Adani Group’s stock market capitalization to over Rs2.4tn since the publication of Hindenburg Research’s short seller report earlier this week.
Adani pressed ahead with a follow-on offer after the group’s seven listed companies had their market capitalization reduced by nearly $11bn on Wednesday following Hindenburg’s allegations that the group was involved in share price manipulation and fraud. Books close on Tuesday.
Adani Group has denied the allegations, calling the report “a malicious combination of selective misinformation and stale, base and discredited allegations” intended to “damage Adani Group’s reputation” and undermine demand for stock sales.
A self-made tycoon who started as a commodities trader, Adani built India’s largest private infrastructure group. He has substantial stake in all the listed companies of the group, including about three-fourths stake in Adani Enterprises.
Adani has said it is considering legal action against Hindenburg. Hindenburg’s next response was to say that the group “will welcome it.”
“If Adani is serious, it should also file a lawsuit in the US, where we operate,” the short seller said in a statement. “We have a list of documents that we will expect in the legal discovery process.”
Bill Ackman, the billionaire hedge fund manager, on Wednesday described the Hindenburg report as “very credible” and “well researched”.