(Bloomberg) — The combined market value of shares of the Adani Group’s 10 companies plunged below $100 billion on Tuesday, as the beleaguered group struggled to reassure investors after a scathing report from a US short seller.
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The port group to power has now lost more than $136 billion in market value since Jan. 24, when US-based Hindenburg Research published a report alleging accounting fraud and stock manipulation — accusations the Adani Group has repeatedly denied.
Billionaire Gautam Adani and his firms have hired legal and communications teams, cut expenses and paid down debt as they seek to assuage traders worried about the group’s access to financing. While the campaign has brought back the conglomerate’s dollar bonds from the devastated region, the continued sell-off in stocks is an indication that more is needed.
“Capex and debt remain major concerns,” said Samir Kalra, founder of Target Investing in Mumbai. “These can influence ratings further.”
The group has tapped international bond buyers more than $8 billion in recent years, while also turning to global banks for the same amount of foreign-currency loans, according to data compiled by Bloomberg. The ratings agencies have also revised the outlook for some companies, including Adani Green Energy Ltd. and Adani Ports & Special Economic Zone Ltd.
Adani and his companies now prioritize financial health over the violent debt-fueled expansion spree of recent years. The group’s focus has shifted to preserving cash, paying down debt, and recovering pledged shares as it attempts to repair the damage caused by the Hindenburg Report.
Trading in the group’s shares was mixed on Tuesday, with little change in the main trading of Adani Enterprises Ltd as of 11:04 am in Mumbai. Adani Green and Adani Transmission Ltd. and Adani Total Gas Ltd up 5% as a maximum, while Adani Power Ltd rose by the same size and Adani Ports rose about 2%.
(Updates with stock movements in the last paragraph)
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