Adani companies lose $65bn in value amid feud with US short-seller

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Indian group Adani, locked in battle with Hindenburg Research, hits back at report that raised concern about its debt and the use of tax havens

Indian group’s response to Hindenburg Research report on its debt and use of tax havens fails to pacify investorsShare prices of most Adani Group companies fell sharply on Monday as the Indian conglomerate’s rebuttal of a US short-seller’s criticism failed to pacify investors, deepening a market rout that has led to stock losses of $65bn.

Adani Enterprises’ $2.5bn secondary share sale closed its second day amid weak investor sentiment. The stock closed at 2,892.85 rupees, 7% below the 3,112 rupees lower end of the offer price band. The upper band is 3,276 rupees. “Retail participation is likely to have a shortfall with current market prices still trailing the offer price and sentiment taking a hit due to the Hindenburg controversy,” said Hemang Jani, an equity strategist at Motilal Oswal Financial Services.

Indian regulations say the share offering must receive a minimum subscription of 90%, and if it does not the issuer must refund the entire amount. Maybank Securities and Abu Dhabi Investment Authority are among investors who bid for the anchor portion of the issue. LIC took 5% of the $734m anchor portion. It already holds a 4.23% stake in the flagship Adani firm, while its other exposures include a 9.14% stake in Adani Ports and 5.96% in Adani Total Gas.

In its response on Sunday, Adani highlighted its relationships with local and international banks and its access to diverse funding sources and structures, listing US banks Citigroup and JPMorgan Chase & Co, as well as other lenders including BNP Paribas, Credit Suisse, Deutsche Bank, Barclays and Standard Chartered.

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