According to Forbes, Indian billionaire Gautam Adani’s current net worth in 2023 is now $61.9 billion, making him the 17th richest person in the world even after the recent Hindenburg Research report that accused him and his companies of fraud on an unimaginable scale. This is down from his peak net worth of $148 billion on September 9, 2022. His net worth was $8.9 billion in 2020, $50.5 billion in 2021, and $90 billion on average in 2022.
Why is Adani’s net worth falling?
On January 24, 2023, Hindenburg Research disclosed a short position against Adani Group’s listed companies and published a report that accuses the Indian conglomerate of engaging in “brazen stock manipulation and an accounting fraud scheme over the course of decades.”
The Adani Group’s CFO Jugeshinder Singh dismisses the allegations in a video address calling them “a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts.” [1]
How much has Adani lost?
Adani’s companies have lost $110 billion in market cap value since the Hindenburg report on January 23, 2023, and his own wealth has been cut in half to $61.9 billion as investors sell the stocks they own in his companies.
Gautam Adani briefly fell out of the world’s top 20 richest people on Friday (February 3rd) after losing $12 billion in that one day, a huge fall from his former ranking as the world’s third-richest person as his large corporate empire fights to contain the escalating negative reaction caused by allegations of both corporate fraud and stock price manipulation.
Adani’s net worth fell for a short time to approximately $58 billion on the morning of February 3, 2022, according to Forbes’ real-time tracking website, later returning higher to around $62 billion. The drop marked a loss of more than $10 billion in one day and for a short time pushed Adani below Walmart heirs Jim and Rob Walton and off of the list of the world’s top 20 wealthiest people.
Last week Adani was the richest person in Asia and the third-richest person in the world but has fallen now to the third-richest person in Asia, behind India’s Mukesh Ambani and China’s Zhong Shanshan.[2]
The bulk of Adani’s fortune is derived from public stakes held in the Adani Group, the Indian conglomerate he founded.
He owns close to 75% of Adani Enterprises, Adani Transmission, and Adani Power, according to December 2022 stock exchange filings. He also owns more than 60% of Adani Green and Adani Ports, and more than one-third of Adani Total Gas, according to December 2022 filings. All of these companies are publicly traded and based in Ahmedabad, India. The shares are held by promoter groups, which include family members and holding companies that are credited to Adani to reflect his status as founder.
According to its website, Adani has the largest port operator, a closely held thermal coal producer, and a coal trader in India.
Gautam Adani is chairman of the Adani Group, which has annual revenue of $23 billion (USD). Adani Enterprises, the group’s listed trading house, reported revenue of $9.3 billion in the year to March 31, 2022. In January 2023, Adani Group was a $218 billion (USD) corporate conglomerate before losing over $100 billion in market cap after the market sell-off of its stocks following the negative report. Adani Group has businesses in ports, airports, power generation and transmission, and green energy, among many others. The Adani Group, which began in 1988 as a commodities trading firm, expanded through acquisitions and with the support of Indian Prime Minister Narendra Modi. Adani is India’s biggest airport operator and controls Mundra Port, India’s most significant, in his home state of Gujarat. Adani became India’s second-largest cement producer in 2022 after acquiring Swiss firm Holcim’s Indian assets for $10.5 billion. [3]
In January 2023, U.S. firm Hindenburg Research issued a report accusing Adani and his companies of financial fraud and stock market manipulation. The Adani Group has denied the reported accusations of wrongdoing and fraud. Shortly after the report was made public, Adani’s fortune plummeted by over $50 billion. According to Forbes and Bloomberg Billionaires Index, Adani’s net worth is estimated at $61.9 billion as of February 6, 2023, making him the 17th richest person in the world.[3] India’s Adani Group lost $118 billion in market cap ten days following the Hindenburg Research report was made public.[4]
The recent January 2023 report from New York-based investor Hindenburg Research made the allegations of both stock manipulation and accounting fraud against Adani Group. Falls in Adani Groups’ bonds and shares in the days after the report was published led to a fall in Adani’s personal fortune of more than $60 billion. Adani dismissed Hindenburg’s report as “stale” and “baseless.” [5]
The bonds of Adani group’s flagship firm plunged to distressed levels in U.S. trading. The company abruptly pulled a record domestic stock offering after shares in the Adani group suffered a $92 billion crash. Following this, on Wednesday, Swiss lender Credit Suisse stopped accepting bonds by Adani group companies as collateral for margin lending. Citigroup Inc.’s wealth arm has also stopped accepting securities of Gautam Adani’s group of firms as collateral for margin loans as banks ramp up scrutiny of Adani’s finances. “In recent days, we have seen a dramatic price drop of Adani-issued securities,” Citigroup said in an internal memo seen by Bloomberg. “Stock and bond prices have plummeted following the negative news around the group’s financial health.”
The Reserve Bank of India has reportedly wanted the details of lenders’ exposures to the Adani Group, the day after the corporate conglomerate withdrew the Rs 20,000-crore follow-on-public offer (FPO) of its flagship company Adani Enterprises. The National Stock Exchange (NSE) has three Adani stocks, Adani Enterprises, Adani Ports, and Ambuja Cements, under this additional surveillance measure (ASM) framework enacted on February 3, 2023. The Indian market regulator SEBI and the bourses put this risk containment and surveillance in place to monitor highly volatile stocks. When placed under ASM, the entire traded value will get blocked as margins, and no intraday leverage is not given for trading or investing. [6]
Who is the richest man in India?
Mukesh Ambani is the current richest man in India with an $83 billion net worth after overtaking Gautam Adani in 2023.
The gap between Gautam Adani and Mukesh Ambani’s net worth is only widening by the day. Adani, who had briefly become the second-richest person in September last year, has been pushed out of the top 15 billionaires list entirely. At the same time, Mukesh Ambani has held on to his fortune of over $80 billion and is ranked as the 12th richest person in the world.
The price action of the Indian stock market as a whole is now correlated with the fate of Adani’s business empire.
