Since the explosive Hindenburg Research report, the market value of Adani Group stocks has lost more than $132 billion, but none has been hammered more than Adani Total Gas Ltd.
Since the short seller report was released on January 24th, the company’s shares have lost more than three-quarters of their value. Prior to that, it had the highest stock valuation in the group and was also considerably less liquid. Hindenburg estimated that, on average, the value of seven of the conglomerate’s shares was inflated by 85%.
In the opening hours of trade on Monday, Adani Total was down to its limit. Since January 27, according to data gathered by Bloomberg, it has done so every day. As the selloff grew worse, Indian markets changed the daily cap for the stock to 5% from 20%.
According to Abhay Agarwal, a fund manager of Piper Serica Advisors Pvt., Adani Total Gas “is under fundamental as well as technical pressure, which has led to the decline.” The problems peculiar to the company have increased, and the decline in European gas prices “will put pressure on the profitability,” he warned.
Even while the equities market shock from claims of stock manipulation and accounting fraud made by Hindenburg is beginning to subside, concerns regarding the Adani Group’s access to foreign financing continue.
Although billionaire Gautam Adani and his businesses have taken action, including repaying debt and promising to lower leverage ratios, investors are nonetheless concerned about the debt and cashflow levels.
A multi-billion dollar plan to manufacture green hydrogen with Adani Group was put on hold following the publication of the Hindenburg report, which was a setback for the gas unit of the French energy giant TotalEnergies SE. The amount of debt owed by Adani Total Gas is another issue.
According to an exchange filing, the business will have combined maturing debt obligations in the fourth quarters of its fiscal years 2023 and 2024 that are greater than its cash balance. But it also has Rs 9.32 billion in cash flow from assets.
According to statistics gathered by Bloomberg, the stock’s float, or the portion that is available to trade on the open market, is around 19 percent.That is the lowest in the group, following Adani Wilmar Ltd. MSCI Inc. decreased the amount of the company’s freely tradable shares in its most recent quarterly index review, although the implementation has since been postponed.
