Sell-off in Adani group shares resumes after George Soros’ comments

• The sell-off in Adani group stocks resumed on Friday, a day after the group companies witnessed buying across the board.
  
• Halfway through the trade on Friday, the cumulative market capitalisation of the nine Adani group companies declined by ₹18,619 crore.
  
• On Thursday, noted businessman and philanthropist George Soros said that the Adani group crisis will spur a “democratic revival in India”.
  
• Union minister Smriti Irani hit back by saying Soros had “now made known his ill intentions in the democratic processes of India.”
  

The sell-off in Adani group stocks resumed on Friday, a day after the group companies witnessed buying across the board. Unlike previous days, though, the stocks’ movements were mixed, with two companies hitting lower circuits, while Adani Power was locked at its upper circuit.

Halfway through trading on Friday, the cumulative market capitalisation of the nine Adani group companies fell below the ₹10 lakh crore level once again after a decline of ₹18,619 crore. Group flagship Adani Enterprises was the biggest loser with a decline of ₹12,504 crore.


Source: NSE, as at 1 p.m., February 17, 2023

Soros says Adani crisis will lead to India’s democratic revival, govt hits back

On Thursday, noted businessman and philanthropist George Soros said that the Adani group crisis will spur a “democratic revival in India”, adding that Prime Minister Narendra Modi will have to answer questions about the allegations of stock manipulation and accounting fraud against the group.

“Adani Enterprises tried to raise funds in the stock market, but he failed. (Gautam) Adani is accused of stock manipulation and his stock collapsed like a house of cards. Modi is silent on the subject, but he will have to answer questions from foreign investors and in parliament,” Soros said.

However, hitting back at Soros, union minister Smriti Irani said, “George Soros, who hedges bets against many countries, has now made known his ill intentions in the democratic processes of India. Those who support Soros need to know that democracy has prevailed in India and continues to do so.”

Hindenburg Research’s allegations of stock manipulation and accounting fraud – denied by the Adani group – have also resulted in multiple public interest litigations (PIL) being filed in the Supreme Court.

Adani’s refinancing plans

Since the US-based short seller released its damning report on January 24, the Adani group stocks have seen a wipe out of ₹12.3 lakh crore in market capitalisation. The group has been actively looking to soothe investors and regain their confidence.

On Thursday, group company Adani Green Energy announced plans to refinance two bonds totaling $1.21 billion. The group also said it will seek to repay $390 million loans of Adani Transmission using free cash flows or an underwritten plan, in a bid to boost investor confidence.

Last week, the Adani group repaid loans worth $1.1 billion on promoters’ pledged shares.

Since the Hindenburg report was released, the Adani group has faced multiple setbacks, including the withdrawal of Adani Enterprises’ ₹20,000 crore follow-on public offer (FPO), and giving up its bid to acquire DB Power for ₹7,017 crore.

Adani Power had agreed to acquire DB Power in August 2022, with the purchase set to complete by October 2022. Now, after four extensions to complete the acquisition, the deal has collapsed. This comes at a time when the Adani group is rethinking its capital expenditure plans, following the slump in its market capitalisation.

The erosion in market capitalisation of the group companies has been significant, with Adani Total Gas being the top loser, followed by Adani Green and Adani Transmission.


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