The stock rout in Gautam Adani's indebted conglomerate entered a third week as its flagship firm suffered a fresh fundraising setback and a major credit rating agency downgraded the outlook on two of its companies.
According to a report of Bloomberg, All 10 of the group's stocks fell in early Mumbai trading on Monday. Flagship Adani Enterprises Ltd. slumped as much as 9.7%. The meltdown since US short-seller Hindenburg Research made fraud allegations against the group in a Jan. 24 report has wiped out $118 billion, or more than half of the market value of its companies. Adani has repeatedly denied the claims.
Meanwhile, worries about the conglomerate’s access to funding are also rising. Adani Enterprises has shelved a key bond sale, Bloomberg News reported on Saturday, less than a week after it abruptly abandoned a record domestic stock offering. S&P Global Ratings cut its outlook on Adani Ports and Special Economic Zone Ltd. and Adani Electricity Mumbai Ltd. to negative on Friday.
Adani did have a lot of debt, so in terms of the corporate governance, there are always question marks around them," Catherine Yeung, an investment director at Fidelity International Ltd., told Bloomberg Television Monday. "This really reiterates how, especially in emerging markets, you really have to have an understanding of companies, really going to find detail about their balance sheet.