Adani Stock Wipeout Deepens to $104 Billion After Flagship Firm Pulls Share Sale

[Imran Khan]

The list of 28 absconders, who looted ₹10 lakh crores from India and fled, has 27 Hindus from Gujarat!

 

[Paji]

While there is definitely still crony capitalism in India but institutional corruption has definitely gone down a lot during the Modi years. Gautam Adani has been a very successful first generation businessman and in a country like India where the demand for capital for mega infrastructure projects outstrips supply, it is difficult for even honest politicians across political parties to turn down an entrepreneur who is willing to take on projects no one else is.

While Mr Adani's rise was undoubtedly intertwined with Mr Modi's, I dount his downfall will be. State institutions have not stepped up to help him during the recent rout and the Finance Minister has even said it is a company specific problem, not an attack on India. Mr Modi has had an incorruptible image so far and I am sure he will not sacrifice that to save the Adani group.

That said, no illegality or fraud has yet been proven. The main issue is that their shares had been trading at sky high valuations compared to their peers. As that corrects, Mr Adani and equity investors in his group companies have and will undoubtedly lose money. It is not clear that there will any wider systemic contagion or even that the Adani group will have problem paying its debts. In fact they have announced they will prepay some of the loans taken against pledged shares. There has been other positive news like strong profits from one of the group companies and JPMorgan keeping their bonds in its index and Adani stocks are rallying hard today.

 

[DabbuSardar]

The list of 28 absconders, who looted ₹10 lakh crores from India and fled, has 27 Hindus from Gujarat!

Amused, hindus from gujarat are no good?


On Adani, too much fog, but hey welcome to free market economics, didnt hear nobody cry when his stock made peoples rich.

Only losers whine..

 

[Fireurimagination]

Time to search or make some other straws to clutch on to...

 

[nahtanbob]

the risk lies in how much exposure the indian banks has to Adani bonds. Those bonds have now lost over %50 value. Currently Indian banks are saying their exposure is limited but $100 billion is a massive amount and someone has to cover it.

I estimate indian bank and insurance company losses at 30-40 billion

 

[Fireurimagination]

I estimate indian bank and insurance company losses at 30-40 billion

There are no losses, Adani haven't defaulted on any Bank loan payment (in fact they are pre-paying loans) and LIC has come out with a statement that even after all the fall Adani shares in their portfolio are still in the green

 

[Paji]

There are no losses, Adani haven't defaulted on any Bank loan payment (in fact they are pre-paying loans) and LIC has come out with a statement that even after all the fall Adani shares in their portfolio are still in the green

Equity investors have lost money, but that is part of the game. The stock valuations were too high. Those holding them should have known better and no one complained when they went up 10 times in short order. However, there seems to be no contagion or any imminent possibility of debt default.

 

[Fireurimagination]

Equity investors have lost money, but that is part of the game. The stock valuations were too high. Those holding them should have known better and no one complained when they went up 10 times in short order. However, there seems to be no contagion or any imminent possibility of debt default.

Even equity investors if they hold on to their shares and Modi government returns again in 2024, then sooner rather than later Adani shares will return a profit. Everybody knew Adani shares were over-priced and over-valued, this forced correction is actually a good thing for the markets overall.

 

[legacytiger18]

Even equity investors if they hold on to their shares and Modi government returns again in 2024, then sooner rather than later Adani shares will return a profit. Everybody knew Adani shares were over-priced and over-valued, this forced correction is actually a good thing for the markets overall.

This is exactly like Tesla shares which are atleast over-valued by 100%. Samething happened with Meta as well. Never the less, any wrong doings must be condemned and investors will become cautious going forward which is not good if India wants to become $10 trillion economy .

 

[pikkuboss]

This is exactly like Tesla shares which are atleast over-valued by 100%. Samething happened with Meta as well. Never the less, any wrong doings must be condemned and investors will become cautious going forward which is not good if India wants to become $10 trillion economy .

DII is strong in India. The less the FPI, the less the headache. FPIs contribute nothing to the economy. FDI is more important which is going well.

 

[kingQamaR]

Theirs empire is and was always dubious ...

 

[nahtanbob]

There are no losses, Adani haven't defaulted on any Bank loan payment (in fact they are pre-paying loans) and LIC has come out with a statement that even after all the fall Adani shares in their portfolio are still in the green

at least some losses on paper depending on the cost basis

 

[Edevelop]

India is a corrupt country and the disparity between rich and poor is unbelievable. I'm not surprised. You reap what you sow.

 

[letsrock]

Its absolutely clear that Adani leverage is proximity to political power.
Nowhere in the world will basic commodity business like Gas, solar have p/E multiples close to a 1000 ! Tesla trades at 53 and it is in a high tech or entirely new industry.

This is why india remains poor. Your success depends on political wheeling dealing.

While there is definitely still crony capitalism in India but institutional corruption has definitely gone down a lot during the Modi years. Gautam Adani has been a very successful first generation businessman and in a country like India where the demand for capital for mega infrastructure projects outstrips supply, it is difficult for even honest politicians across political parties to turn down an entrepreneur who is willing to take on projects no one else is.

While Mr Adani's rise was undoubtedly intertwined with Mr Modi's, I dount his downfall will be. State institutions have not stepped up to help him during the recent rout and the Finance Minister has even said it is a company specific problem, not an attack on India. Mr Modi has had an incorruptible image so far and I am sure he will not sacrifice that to save the Adani group.

That said, no illegality or fraud has yet been proven. The main issue is that their shares had been trading at sky high valuations compared to their peers. As that corrects, Mr Adani and equity investors in his group companies have and will undoubtedly lose money. It is not clear that there will any wider systemic contagion or even that the Adani group will have problem paying its debts. In fact they have announced they will prepay some of the loans taken against pledged shares. There has been other positive news like strong profits from one of the group companies and JPMorgan keeping their bonds in its index and Adani stocks are rallying hard today.

what crap. Adani forcibly acquired airports like GVk mumbai from businessman who actually built them. Most of adani ports or airports were actually built by other businessmen who were sidelined by Modi administration and given to Adani.

 

[siegecrossbow]

A Pandora Papers ex-banker is Adani's man in London

Sanjay Newatia, a former Credit Suisse banker, is a director in 57 Adani companies in the UK

qz.com