Adani group market cap loss equivalent to joint m-cap of HUL and ICICI Bank

Adani group stocks have witnessed volatility since the release of the Hindenburg report on 24 January, which resulted in erosion in the market capitalisation (m-cap) of the conglomerate’s listed entities. The fall in billionaire Gautam Adani-controlled stocks continued on Wednesday, with the nine listed companies losing total m-cap of ₹33,438 crore in the first hour of trade so far. The combined market value of Adani group companies slipped to ₹7,74,356 crore today, from ₹8,07,794 crore on Tuesday, which is less than HDFC Bank's m-cap of ₹9,12,986 crore, the country’s third most valued firm in terms of market capitalisation after Mukesh Ambani’s Reliance Industries (₹16,24,156 crore) and Tata Consultancy Services (₹12,57,268 crore).

In the selloff that began on January 24, Adani group stocks suffered a cumulative loss of ₹11,43,702 crore in the last nineteen sessions, from ₹19,18,058 crore to ₹7,74,356 crore, which is nearly equivalent to joint m-cap of ICICI Bank (₹5,93,586 crore) and Hindustan Unilever Ltd (₹5,87,550 crore), the fifth and sixth largest companies in terms of BSE market cap as on today.

On Wednesday, all nine Adani group stocks were trading in red, with Adani Total Gas, Adani Green Energy, and Adani Transmission hitting their 5% lower circuit limits on the BSE. While Adani Enterprises, the flagship company of the group, was the biggest loser with 8% loss, ACC and Ambuja Cements saw the least correction, falling between 2-3%. Shares of Adani Power, which hit 5% upper circuit in the last four consecutive sessions, slipped as much as 5% in intraday trade today. The corrections in Adani stocks were in line with the broader market, with the BSE benchmark Sensex declining 535 points to 60,137 levels, tracking weak cues from global peers.

ACC and Ambuja Cements, the recently acquired cement entities of Adani Group, pared their previous session gains. On Tuesday, Adani cement stocks rose after the duo said that they will resume operations at two plants in Himachal Pradesh. Both companies suspended operations at the Gagal and Darlaghat plants in Himachal Pradesh in December last year due to rise in transportation cost. The cement majors were in discussion with transport unions to bring down the freight rates as they transport both raw materials and finished goods.

Among Adani group stocks, Adani Total Gas, which runs city gas distribution (CGD) networks, has been hit the hardest, with its share price nosediving 79% since January 24. The stock has been hitting lower circuit for eighteen straight sessions following allegations against the Adani group by the U.S.-based Hindenburg Research.

The Adani group companies have seen sharp selling pressure since short-seller Hindenburg released a report on January 24, short-seller Hindenburg Research put out a report on January 24, making a series of allegations against Gautam Adani-controlled firms. The report spooked investors’ sentiments and led to sharp volatility in the group companies' share prices, which led to the conglomerate withdrawing  its ₹20,000-crore follow-on public offer (FPO) despite successful completion. In a bid to restore investors’ confidence, promoters across Adani Group companies prepaid over $1.1 billion of loans to release some pledged shares in Adani Ports & Special Economic Zone, Adani Green Energy, and Adani Transmission.