Gautam Adani failed to reassure investors of market turmoil that wiped out billions of dollars

New Delhi
CNN
—

Indian billionaire Gautam Adani tried to reassure investors on Thursday after his sudden abandoned sold $2.5 billion worth of stock in his flagship company.

“For me, the interests of investors are paramount and everything is secondary,” the 60-year-old businessman said in an interview. write video address. “Once the market stabilizes, we will review our capital markets strategy.”

This is the first time the tycoon has spoken of the stock market turmoil that has taken billions of dollars from his energy and logistics business empire.

A week-long crisis in the value of Adani Group shares began when an American short seller accused the group of fraud. The group, which has seven listed companies, has lost more than $90 billion in market value in the week since Hindenburg Research published its report.

Foreign banks have begun to scrutinize the group. Based on Bloomberg, Credit Suisse has stopped accepting bonds from Adani companies as collateral for margin loans to its private banking clients. The Swiss lender declined to comment on CNN’s request for confirmation.

Despite the turmoil, the group’s flagship, Adani Enterprises, managed to issue $2.5 billion worth of new shares on Tuesday. The fundraising exercise is seen as India’s largest ever public offering by a listed company. After a tedious start, the offer is fully booked.

However, a day later, Adani abandoned the deal. The shares have been trading significantly below the asking price since last week, meaning investors in the capital raise are looking at immediate losses.

“Therefore, to protect investors from potential losses, we withdrew funds,” Adani said in the video. “This decision will not have any impact on our current operations and future plans. We will continue to focus on delivering and delivering projects on schedule.”

Adani added that his team’s fundamentals are “strong” and that it has “an impeccable track record in meeting our debt obligations”.

In an investigation published on January 24, Hindenburg Research accused the Adani Group of “conspiracy to commit accounting fraud and blatant stock manipulation over the course of decades”.

The research firm also questioned the “excessive valuations” of Adani companies and said their “significant debt” had put the entire group in a “precarious financial position”.

Although the Adani Group immediately denounced the report as “baseless” and “malicious,” the video speech marked the first time the founder spoke about the crisis.

But it was not enough to calm the market. Shares of Adani Enterprises fell nearly 9% in Mumbai, while shares of his other companies fell between 5% and 10%.

Indian market regulators are yet to comment on the events of the past week. But, Reuters reported Wednesday that the Securities and Exchange Commission of India (SEBI) is examining falling share prices and also looking into any possible anomalies in Tuesday’s share sale, citing a source with knowledge of the matter. direct knowledge of the matter.

Wednesday’s cancellation of the share sale was a major setback for one of India’s most prominent industrialists. Just a week ago, Adani’s vast conglomerate was worth more than $200 billion, making him Asia’s richest man by a large margin. At one point last year, he even surpassed Jeff Bezos to become the second richest person in the world.

On Wednesday, Adani lost her spot as Asia’s richest person, according to Bloomberg Billionaire’s Index. He has a net worth of $72.1 billion, according to the index, second to Mukesh Ambani, who has a fortune of $81 billion.

CNN’s Mark Thompson contributed to this report.