Gautam Adani’s Wealth Swells By USD5.6 Billion On Relief Rally

A stocks rally in firms owned by Gautam Adani added $5.6 billion to his net worth last week after India’s top court concluded hearings in a lawsuit where the markets regulator is probing wide-ranging allegations of corporate malfeasance against the conglomerate.

The founder of the Adani Group, whose stocks were battered earlier this year after a bombshell shortseller report in January, now ranks 20th on the Bloomberg Billionaires Index with a $65.8 billion fortune.

Most of this gain was on Tuesday — the first trading day last week after India’s Supreme Court reserved its verdict on the probe saying it won’t take scathing media reports on the conglomerate as the “gospel truth”. The final court ruling is awaited.

Investors, however, seem to have taken court’s observations as a positive cue, stoking a relief rally in Adani’s group of companies.

The ports-to-power conglomerate added US$12 billion to its market value last Tuesday, making it the best day for the group since Hindenburg Research’s Jan 24 report that accused it of accounting fraud and stock price manipulation. Adani Group has repeatedly denied these allegations.

“The general view is that the worst is behind, and now we will not hear about Hindenburg,” said Abhay Agarwal, the founder and portfolio manager at Mumbai-based Piper Serica Advisors.

Adani Group stocks added about US$9.8 billion in market value on Monday, with Adani Green Energy Ltd and Adani Enterprises Ltd leading the gains. The flagship unit, which is an incubator for the conglomerate, jumped as much as 10% in Mumbai trading.

The surge was part of a broader market rise after Prime Minister Narendra Modi’s Bharatiya Janata Party won three state elections over the weekend.

Adani, who is seen as close to the premier, has openly pegged his infrastructure empire to Modi’s development goals. 

The BJP’s state election gains “seems to have led to buying interest in Adani”, said Deepak Jasani, the head of retail research at HDFC Securities Ltd.

“The visibility of infrastructure-related investments continues to be bright.”

Back in March, the Supreme Court asked the local market regulator to probe the US short seller’s accusations against the Adani Group that triggered a stock rout so severe that it wiped out US$153 billion off its market value at one point.

A six-member expert panel appointed by the court said in its interim report in May that it saw no regulatory failure or signs of price manipulation in Adani stocks.

While the court’s verdict is still awaited and the outcome of the regulatory probe is not known — signalling the continuing overhang on the conglomerate — the investors seem to be sanguine about Adani Group’s prospects.

The conglomerate has in recent months secured a US$3.5 billion refinancing, funding from a US government-backed financier for a Sri Lanka port project as well as investments from GQG Partners and Qatar Investment Authority. 

Last week’s gain only partially makes up for the wealth erosion that Adani has seen this year.

A first-generation entrepreneur who started as a diamond trader in Mumbai in the 1980s and was the second-richest person briefly in 2022, the tycoon has lost US$55 billion — the biggest wealth loss for any tycoon this year. – Bloomberg

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