{"id":145802,"date":"2023-02-02T08:00:00","date_gmt":"2023-02-02T00:00:00","guid":{"rendered":"https:\/\/www.mediaintel.asia\/?p=913107"},"modified":"2023-02-02T08:00:00","modified_gmt":"2023-02-02T00:00:00","slug":"share-debacle-a-rare-setback-for-indian-tycoon-adani","status":"publish","type":"post","link":"https:\/\/www.chinalegalblog.com\/en\/2023\/02\/02\/share-debacle-a-rare-setback-for-indian-tycoon-adani\/","title":{"rendered":"Share debacle a rare setback for Indian tycoon Adani"},"content":{"rendered":"
\"MediaIntel.Asia\"<\/a><\/div>\n

Gautam Adani speaks during the inauguration of Vibrant Gujarat Global Investor summit in Gandhinagar, India, Jan. 12, 2011. Embattled Indian billionaire Adani called off his flagship company's $2.5 billion share sale late Wednesday, Feb. 1. 2023, after a tumultuous week saw his conglomerate shed tens of billions of dollars in market value after claims of fraud from a U.S.-based short-selling firm. (AP Photo\/Ajit Solanki)
\nNEW DELHI \u2013 Indian billionaire Gautam Adani grinned as he posed this week for photos with Israeli leader Benjamin Netanyahu after acquiring one of the country's main ports, in Haifa.
\n\u201cI promise you that in the years to come, we will transform the skyline we see around us,\u201d said Adani, his manner upbeat even as his business empire was losing billions. Investors have been dumping Adani shares for more than a week after U.S. short-selling firm Hindenburg Research put out a report alleging his businesses have engaged in fraud and stock price manipulation. The Adani group have denied this.
\nBefore the debacle, Adani, 60, was Asia's richest man and the third wealthiest in the world, according to Bloomberg's Billionaires Index. Not anymore.
\nThe massive losses are a rare setback for the coal mining tycoon from western India's Gujarat state and raise questions about what lies ahead.
\nExpansion has been at the heart of Adani\u2019s success story. The son of a middle class family in the Gujarat capital Ahmedabad, he quit college to become a diamond trader in the financial capital Mumbai. He returned home to join his brother in importing plastics before establishing Adani Enterprises in the 1980s, trading in everything from shoes to buckets.
\nAdani shifted to investing in ports, construction and coal mining as India opened up its economy in the 1990s. A new middle class emerged and the ambitious businessman placed bets on providing energy to serve them.
\nAdani\u2019s first big project, the Mundra Port, is now the India\u2019s largest commercial port and he is the country\u2019s biggest private port operator. Within a decade, he also became India\u2019s largest developer and operator of coal mines.
\nToday, Adani companies also operate airports in major cities, build roads, generate electricity, manufacture defense equipment, develop agricultural drones, sell cooking oil and run a media outlet. He has his eyes set on becoming the world\u2019s largest renewable energy player by 2030.
\nCiting market volatility, late Wednesday his flagship Adani Enterprises scrapped a $2.5 billion share offering that, despite the bloodletting in the group's shares and a 28% plunge that day in its own share price, had been oversubscribed.
\nIn a video address Thursday, Adani said the share offering was canceled to \u201cinsulate investors from potential losses.\u201d
\n\u201cFor me, the interest of my investors is paramount and everything else is secondary,\u201d he said.
\nThe share offering was seen as a test of investor confidence in the self-made industrialist, whose ascent has been celebrated as a symbol of India\u2019s economic ambitions. The Adani Group said in a statement that canceling the offering would not \u201chave any impact on our existing operations and future plans.\u201d
\nThe Adani Group said in its statement Wednesday that its balance sheet was \u201cvery healthy\u201d and its history of servicing debt was \u201cimpeccable.\u201d
\nStill, Brian Freitas, a New Zealand-based analyst with Periscope Analytics who has researched the Adani Group, said the collapse in share prices for India's second-largest conglomerate may hinder its future plans for expansion.
\n\u201cIt\u2019s going to be difficult for them to raise new money,\" he said.
\nAdani shares are still losing value. Shares in Adani Enterprises tumbled 27% Thursday, while stock in six other Adani companies fell 5%-10%.
\nThe tycoon, who favors a plain white shirt and dark trousers over fancy dress and is said to be affable and quiet spoken, slid from being the world\u2019s third richest man to the 13th as his fortune sank to $72 billion, according to Bloomberg\u2019s Billionaire Index. Prior to the Hindenburg report, his net worth was about $120 billion.
\nMore vitally, the company is now without the funds it had hoped to raise in this week's offering. Companies often launch such share offerings to finance growth while reducing debt.
\n\u201cThanks to the short-seller, Adani\u2019s plans will get slowed down significantly,\u201d said R N Bhaskar, a journalist who wrote a biography on Adani.
\nAnalysts say that rapid expansion has largely been fueled by borrowing. The group's debt stands at $30 billion, out of which $9 billion is from banks, the group's chief financial officer said recently.
\nAfter the stock rout of the past week, lenders may deem his group high risk and toughen their criteria for borrowing, like demanding higher interest rates or more collateral, said Freitas.
\n\u201cEquity investors are going to be wary because the stock isn't doing well - if they can't raise equity, they will have to go to the debt market,\" he added. \u201cGiven the situation, foreign lenders will think twice before lending any new money to Adani.\u201d
\nDespite Adani's longstanding ties with Prime Minister Narendra Modi, a fellow Gujarati, and other powerful politicians, the government has so far remained silent on his recent troubles even as pressure from the political opposition for an investigation into Adani's situation grows.
\nIn recent years, Adani has pumped money into sectors like agriculture, defense and renewable energy - all that are seen as high priorities for the Indian government.
\nLike Adani's commitment to the port in Israel\u2019s Haifa, many of the group's overseas infrastructure projects, in countries like Sri Lanka and Tanzania, have served as an Indian counterweight to rival China's holdings.
\nThe Haifa deal was a coup for India, located close to another port managed by the Shanghai International Port Group.
\n\u201cIndia is working with great fervor with Israel on defense and technology, and Adani now has a port there. You think the Indian government can sniff at that?\" said Bhaskar. \u201cThe thing is, you can't wish away Adani - because he is indispensable at this point.\u201d
\nHe expects Adani to remain undaunted.
\n\u201cThe more challenging a situation gets, the more defiant and creative he becomes to overcome it,\" Bhaskar said.<\/p>\n

This data comes from MediaIntel.Asia's Media Intelligence and Media Monitoring Platform<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Gautam Adani speaks during the inauguration of Vibrant Gujarat Global Investor summit in Gandhinagar, India, Jan. 12, 2011. Embattled Indian billionaire Adani called off his flagship company's $2.5 billion share sale late Wednesday, Feb. 1. 2023, afte…<\/p>\n","protected":false},"author":253,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[934,669,144,586,325,671,137,931,1607,194,401,1542],"tags":[7010,3450,8707,10315,10448,10325,3563,8864,7571,10440,10558,10453],"class_list":["post-145802","post","type-post","status-publish","format-standard","hentry","category-agriculture","category-bank","category-china","category-economy","category-education","category-finance","category-fraud","category-india","category-manufacturing","category-news-chinese-law","category-shanghai","category-technology","tag-expansion","tag-indian","tag-israel","tag-media-intelligence","tag-modi","tag-new-delhi","tag-new-zealand","tag-news-media","tag-oil","tag-shoes","tag-short-sale","tag-tanzania"],"_links":{"self":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts\/145802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/users\/253"}],"replies":[{"embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/comments?post=145802"}],"version-history":[{"count":1,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts\/145802\/revisions"}],"predecessor-version":[{"id":145803,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/posts\/145802\/revisions\/145803"}],"wp:attachment":[{"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/media?parent=145802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/categories?post=145802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.chinalegalblog.com\/en\/wp-json\/wp\/v2\/tags?post=145802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}