Topline
Gautam Adani on Thursday addressed his flagship company’s canceled $2.5 billion public offering and promised a review of the Adani Group’s market strategy in his first public remarks since U.S.-based short-seller Hindenburg Research accused the Indian conglomerate of engaging in stock manipulation and fraud.
This grab from video released by Adani Enterprises on Thursday.
Key Facts
In a video addressing investors, Adani said the decision to withdraw his flagship firm’s follow-on public offering was taken due to the “volatility of the market” adding that it would not have been “morally correct” to go ahead under the circumstances.
The billionaire said his group will review its capital market strategy after “the market stabilizes.”
Adani added that the decision would have no impact on the conglomerate’s existing operations and future plans adding that the company’s earnings and cash flows have been “very strong” and “we have an impeccable track record of fulfilling our debt obligations.”
The billionaire did not directly address the allegations made by Hindenburg last week that led to his companies getting routed on the stock market.
The address appears to have done very little to assuage the market with shares in the flagship Adani Enterprises dropping by another 20% as of Thursday afternoon.
All of the Adani Group’s other listed firms were also in the red with several of them hitting their lower circuit limit for the day.
Forbes Valuation
According to our estimates, Gautam Adani’s current net worth stands at $68.4 billion—dropping by another $6.3 billion just on Thursday. Adani’s total net worth has shrunk by $58 billion since Hindenburg’s allegations against his companies became public. He’s currently the 16th richest person in the world, down from third place last week.
News Peg
The issue spilled over to the Indian Parliament on Thursday, with both houses being briefly adjourned as Opposition parties demanded a probe into public sector financial institutes’ exposure to Adani Group companies. Mallikarjun Kharge, the leader of the opposition in the Parliament’s Upper House called for a debate on the issue and demanded the setting up of a Joint Parliamentary Committee (JPC) to conduct a probe. Opposition lawmakers have criticized Prime Minister Narendra Modi and his party over their silence on the issue, with many taking an aim at Adani’s close ties to Modi.
Chief Critic
Opposition lawmaker Mahua Moitra—a long-time critic of Adani—took a shot at the company over its canceled FPO by referencing a Forbes report from Wednesday. She tweeted: “Too expensive to buy your own shares at ₹3200 when you can buy them from market at ₹2000! ‘Joke is on us’. Keep fooling [Securities and Exchange Board of India] & don’t disclose source of money. Rampant market manipulation doesn’t make one ‘stand by its investors.’”
Source: https://www.forbes.com/sites/siladityaray/2023/02/02/gautam-adani-addresses-scrapped-public-offering-in-first-public-remarks-since-hindenburg-allegations/