As share rout continues, Adani denies cut in expansion plans

New Delhi, February 13

The rout in Adani shares continued on Monday with most of its key listed companies hitting the lower circuit-breaker early in the morning amid reports that the group might roll back some of its ambitious expansion plans.

Listed companies controlled by Gautam Adani, who once vied for the world’s wealthiest man but has bow dropped out of the top 15, have now lost over $100 billion or well above half of the market value as on January 24 after the US short-seller Hindenburg alleged accounting fraud and manipulation of shares by the Gujarat-based group.

Adani Group shares began tanking early in trading on Monday and all of them immediately hit negative bias amid reports that the conglomerate was walking back on some of the tall expansion announcements it had made in the past. The flagship company, Adani Enterprises, hit the 10% lower-circuit and its share was quoted at 1,663 in the early morning trade before recovering and ending the session at 1,717.65, down 7%.

Adani Ports ended the session at 553.70, down 5.18% while Ambuja Cements lost 5.09% and closed at 342.45. NDTV and four other Adani companies — Adani Transmission, Adani Total Gas, Adani Wilmar and Adani Green — hit the lower circuit-brealer of 5% while Adani Power narrowly avoided their fate by declining 4.99%.

While one foreign wire service reported the Adani Group had halved its revenue growth target and plans to scale down fresh capital expenditure, another overseas wire service quoted the Group as denying the allegations. According to Bloomberg, Adani Group will now aim for revenue growth of 15-20% as against its earlier plans for 40%. The cutback on expansion plans would save about Rs 25,000 crore. But Reuters said the balance sheet of each of Adani Group’s independent portfolio companies was “very healthy”, adding it had secured assets and strong cashflows, with its business plans fully funded.