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Tuesday, May 30, 2023

India’s Adani’s losses swell above $100 Billion.

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Adani’s market losses soared to more than $100 billion on Thursday, raising concerns that it could affect the system a day after the Indian group’s flagship sold a $2.5 billion public offering. A shocking setback in the Adani Enterprises stock sale means a dramatic setback for founder Gautam Adani. The high school dropout-turned-millionaire has seen his fortune grow rapidly over the past few years but in just one week, he’s been a state-based company seller according to United’s critical research report.

Meanwhile, Citigroup’s wealth unit stopped making margin loans to clients against Adani Group securities. The crisis marks a dramatic turn of fortune for Adani, who has in recent years forged partnerships with foreign giants such as France’s TotalEnergies and attracted investors such as Abu Dhabi’s International Holding Company, as he pursues a global expansion stretching from ports to the power sector.

Adani is also no longer Asia’s richest person, having slid to 16th in the Forbes rankings of the world’s wealthiest people, with his net worth almost halved to $64.6bn in a week. India’s central bank has asked local banks for details of their exposure to the Adani Group, government, and banking sources told Reuters on Thursday. Market and investment group CLSA estimates Indian banks were exposed to about 40 percent of Adani Group’s $24.5bn debt in the fiscal year to March 2022.

Dollar bonds issued by Adani Group’s entities extended losses on Thursday, with notes of Adani Green Energy Ltd crashing to a record low. Adani Group entities made scheduled coupon payments on outstanding US dollar-denominated bonds on Thursday. Adani was able to secure shares for sale on Tuesday even though the market price of the shares was below the issue price. Maybank Securities and the Abu Dhabi Investment Authority have bid on the anchor portion of the issuance and the investment has now been repaid by Adani.

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