Adani Selloff pulls the group’s market value below $100 billion

(Bloomberg) – The combined stock market value of the 10 companies that make up the Adani Group slipped below $100 billion on Tuesday as the ailing conglomerate struggles to reassure investors after a damning report from a US short seller.

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The ports-to-power group has lost more than $136 billion in market cap since Jan. 24, when US-based Hindenburg Research issued a report alleging accounting fraud and stock manipulation — allegations that the Adani Group has repeatedly rejected.

Billionaire Gautam Adani and his companies have hired legal and communications teams, cut spending and repaid debt to reassure traders concerned about the group’s access to finance. While the campaign brought back the conglomerate’s dollar-denominated bonds from distressed areas, the continued sell-off in stocks is an indication that more is needed.

“Investing and debt remain major concerns,” said Sameer Kalra, Founder of Target Investing in Mumbai. “These can weigh further on valuations.”

The group has tapped international bondbuyers for more than $8 billion in recent years, while turning to global banks for at least as many foreign currency loans, data from Bloomberg shows. Rating agencies have also revised the outlook for some companies, including Adani Green Energy Ltd. and Adani Ports & Special Economic Zone Ltd.

Adani and his companies are now prioritizing financial health over the past few years’ aggressive, debt-fueled expansion. The group’s focus has shifted to cash saving, debt repayment and clawing back pledged stock as it seeks to repair the damage caused by Hindenburg’s report.

Shares of the group were mixed trading on Tuesday, with flagship Adani Enterprises Ltd. Little changed as of 11:04 am in Mumbai. Adani Green, Adani Transmission Ltd. and Adani Total Gas Ltd. each fell 5%, while Adani Power Ltd. rose by a similar magnitude, with Adani Ports trading about 2% higher.

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(updates with stock movements in last paragraph)

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