Plunge After Hindenburg Report Release on the 24th of Last Month
[Asia Economy Reporter Jeong Hyunjin] Bloomberg reported on the 3rd that the market capitalization of India's Adani Group, which was targeted by the US short-selling firm Hindenburg Research, has disappeared by more than half in just ten days as its stock price plummeted.
According to the report, the total market capitalization of the 10 subsidiaries of the Adani Group has evaporated by more than half, amounting to $118 billion (approximately 145 trillion KRW) since the 24th of last month. The Adani Group's market cap approached $300 billion in September last year and was around $250 billion as of early January.
However, on the 24th of last month, Hindenburg released a report alleging that the Adani Group had inflated its corporate value through stock price manipulation and accounting fraud, causing the stock price to plunge. The stock price of Adani Enterprises, the group's flagship company, has fallen by more than 60% over seven days up to that date.
The plunge in Adani Group's stock price rapidly reduced the wealth of Chairman Gautam Adani, who was once Asia's richest person and the world's second-richest individual. According to the Bloomberg Billionaires Index, as of that day, his wealth stood at $61.3 billion, which is 41% of the peak value ($150 billion) in September last year and 52% of the $119 billion recorded just before the Hindenburg report was released on the 24th of last month. A staggering $58 billion disappeared over the last six trading days.
Bloomberg evaluated that the scale and speed of the decline in Chairman Adani's wealth is the worst since the index began compiling data in 2012.
As the situation worsens, attention is focused on whether the Indian government will intervene in the Adani Group crisis. Chairman Adani has maintained a close relationship with Indian Prime Minister Narendra Modi for decades, and the Adani Group's businesses, including airports, power plants, and data centers, are considered central to Modi's national economic growth strategy.
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