Adani vs. Hindenburg: How Asia’s richest man lost his crown in just a few days

Adani stocks continued to spot crisp losses during Wednesday's trading league successful Mumbai — adjacent though the conglomerate managed to propulsion disconnected a triumph a time earlier.

Adani Enterprises received a ballot of assurance from investors connected Tuesday, erstwhile its $2.5 cardinal follow-on nationalist offering (FPO) was afloat subscribed connected the past day.

The crisp declines bespeak eroded capitalist sentiment from a study released by short-selling steadfast Hindenburg. The Jan. 24 report accused Adani Group companies of "brazen banal manipulation and accounting fraud."

On Wednesday, Adani Group's shares fell aft days of volatile trading.

Shares of Adani Enterprises plunged by 23% connected Wednesday afternoon. Adani Port and Special Economic Zone dropped 14%, Adani Green Energy fell much than 5%, Adani Total Gas mislaid 10% portion Adani Transmission traded 3.5% lower.

The banal rout that followed the announcement amounted to $84 billion, Reuters reported.

According to Forbes, Gautam Adani, the laminitis and president of the group, has mislaid his presumption arsenic Asia's richest antheral to Mukesh Ambani, the president of Reliance Industries.

Hindenburg, which said it has taken a short position successful Adani Group, stands to payment from the declining worth of those stocks.

Adani's conflict with the short-seller steadfast has enactment the group's exposure to Wall Street — amounting to astir $9 billion, according to JPMorgan — nether the spotlight.

In conscionable 1 week, Indian billionaire Gautam Adani saw much than $34 cardinal wiped disconnected his nett worth, according to the Bloomberg Billionaires Index.

Here's a timeline of the large events that led to this.

Jan. 25: Before India's marketplace opened connected Wednesday Asia time, Hindenburg Research announced its abbreviated presumption connected Adani Group companies done U.S. traded bonds and non-Indian traded derivatives. Adani-affiliated stocks saw crisp losses during the trading day. Gautam Adani's nett worthy fell by $6 cardinal overnight.

Jan. 26: India's marketplace was closed for a holiday.

Jan. 27: Adani Enterprises proceeded with opening subscriptions for its follow-on nationalist offering of $2.5 cardinal contempt a continued banal sell-off seen successful radical companies' stocks. The billionaire's nett worthy fell by different $20.3 cardinal to $92.7 billion.

Jan. 28-29: Adani Group released a lengthy 413-pate response implicit the weekend, informing of ineligible enactment against Hindenburg and claimed the accusations raised against the Indian firm was a "calculated onslaught connected India" and its institutions.

Hindenburg changeable backmost and slammed Adani Group's effect arsenic "bloated," claiming it "ignores each cardinal allegation" raised.

Jan. 30: In an interrogation with CNBC-TV18, Adani Enterprises Group CFO Jugeshinder Singh defended the group. He told the CNBC affiliate that the worth of Adani Enterprises has not changed "simply because" of stock terms volatility. Shares of the group's companies continued to spot much losses. Adani's nett worthy falls by different $8 cardinal to $84.5 billion

Jan. 31: Adani Enterprises' $2.5 cardinal stock sale was afloat subscribed connected the last time of subscription, contempt analysts' concerns it whitethorn autumn through.

The 60-year self-made Indian billionaire expanded his empire done deals and the enactment of Indian Prime Minister Narendra Modi, according to Forbes.

He became a billionaire successful 2008 aft launching his commodities export steadfast and surpassed Bill Gates connected the Bloomberg Billionaires Index successful July 2022. It came adjacent arsenic a fig of tech billionaires lost a combined $315 cardinal past year, according to Forbes.

The Adani conglomerate owns India's biggest airdrome relation and the nation's largest larboard operator. The radical precocious sought a hostile takeover of Indian media radical NDTV. In a filing, the media institution said the determination was "carried retired without immoderate consent" from its founders.

Despite his nett worthy seeing crisp falls from Hindenburg's short-seller report, Adani tweeted a photo with Israel Prime Minister Benjamin Netanyahu connected Tuesday.

According to Reuters, the Indian conglomerate has completed its $1.15 cardinal takeover of Israel's Port of Haifa.

Hindenburg's allegations person raised questions astir Adani Group's expansion, mostly driven by debt, and the lax regulations that allowed acquisitions to proceed.

However, economists that CNBC spoke to shrugged disconnected immoderate semipermanent spillover effects.

"I deliberation the events with Adani Group are seen successful isolation," Herald van der Linde, caput of equity strategy, for Asia Pacific astatine HSBC told CNBC. "The Indian equity communicative remains 1 of the champion crossed the region. Growth is disposable and much predictable than elsewhere successful the region."

"In the adjacent term, sentiment and flows whitethorn beryllium adversely impacted, but this should not person a lasting interaction implicit the medium-term," said Sonal Varma, Nomura's main economist for India and Asia extracurricular of Japan told CNBC.

"The cardinal drivers of India's medium-term maturation prospects stay intact, firm and banking equilibrium sheets are overmuch stronger, reforms are focused connected enabling investments and raising productivity, and arsenic a ample market, India volition payment from the ongoing proviso concatenation diversification," she added.

Asked if investors should beryllium buying Adani stocks astatine the moment, Smart Investor's David Kuo, said bluntly: "It is amended to enactment retired of occupation than to get retired of occupation later."

"What Hindenburg is alluding to is that determination is simply a occupation with the debt. And it whitethorn not bespeak itself successful the stock price, but determination whitethorn beryllium a indebtedness problem," Kuo said connected CNBC's "Street Signs Asia."

"It does person a batch of bonds extracurricular of India – what happens if those bonds were to deteriorate successful value, it would person an interaction connected the company," helium said.

"Whether you judge the Hindenburg study oregon not, I deliberation thing needs to happen. Something needs to beryllium clarified earlier investors commencement jumping in," helium added.

– CNBC's Seema Mody contributed to this report.