The Adani Group's market losses have reached over $100 billion, causing concern about potential systemic impact. This comes a day after Adani Enterprises, the group's flagship company, cancelled a $2.5 billion stock offering. The cancelled share sale has led to a dramatic setback for the group's founder, Gautam Adani.
Adani, a former school dropout-turned-billionaire, has seen his fortune decline in the past week following the publication of a critical research report by US-based short-seller Hindenburg.
The cancellation of the share sale led to a decline in Adani stocks, calls from opposition lawmakers for a wider investigation, and the central bank taking action to check banks' exposure.
Citigroup's wealth unit has stopped offering margin loans against Adani Group securities and reduced the loan-to-value ratio for credit against Adani securities to zero, according to a source. Despite partnerships with companies such as TotalEnergies and investment from entities like Abu Dhabi's International Holding Company, Adani's global expansion plans in the ports and power sectors may be in jeopardy.
Adani's cancelation of the share sale has sparked fears of a confidence crisis in Indian shares, according to Ipek Ozkardeskaya, a senior market analyst at Swissquote Bank.
Adani Enterprises alone has lost $24 billion in market capitalization since Hindenburg's report was released on January 24th. Adani's net worth has almost halved to $66 billion in just one week, causing him to drop from Asia's richest person to 16th on Forbes' list of the world's wealthiest individuals. He is now surpassed by Mukesh Ambani of Reliance Industries.