Hindenburg Effect: Adani slips to 7th position in the world’s richest list

Gautam Adani has slipped to seventh on Forbes' real-time list of the world's richest people, as the Adani Group companies have lost a combined market capitalization of $48 billion since Wednesday following the report of Hindenburg Research.

According to the Forbes Real Times Billionaires Index, Adani's wealth plummeted by more than $22.5 billion to $96.8 billion for the day. Adani now ranks below Microsoft founder Bill Gates, whose fortune was estimated at $104.1 billion on the rich list.

Adani Enterprises lost nearly 19 per cent on Friday, the most since 2017. The shares closed 11 per cent below the low end of the price band set for the trailing share sale. Some units including Adani Green Energy and Adani Total Gas slumped over the 20 per cent daily limit, adding to a $12 billion selloff at group companies on Wednesday. Volumes for these shares were at least triple their three-month average.

Adani's seven listed companies tumbled

Shares of the Adani Group's seven listed companies tumbled for a second straight day on Friday, extending their slide after Hindenburg Research said it took a short position in certain group stocks that the Group dismissed as "unsubstantiated". Adani Group has dismissed the report as unfounded and said it is considering legal action against the New York-based firm.

Seven of the Adani Group's publicly traded companies suffered major losses on Friday, January 27, 2023. This led to a sell-off of shares of India-listed Adani Group companies.

Adani had climbed to the second position on the rich list last year when the group's share prices witnessed a big rally. He stayed in the third position for a long time and was recently succeeded by Amazon founder Jeff Bezos ($122 billion). Bernard Arnault (Louis Vitton) and his family top the rich list with a net worth of $216.1 billion, followed by Elon Musk (Tesla, SpaceX, Twitter), whose net worth was last pegged at $170.1 billion.

Sale of shares

Hindenburg Research published its report just as Adani Enterprises was looking to attract a broader network of local and global investors for the sale of its shares. The transaction, the largest follow-on primary public offering in India's history, had already attracted a number of anchor investors before the Hindenburg report emerged, though retail investors and high-net-worth individuals can bid for shares starting today and until January 31st.

The general subscription to the offer was 1 per cent at 3:30 pm in Mumbai. The portion reserved for retail investors sold for 1 per cent, while company employees submitted bids for 4 per cent of the shares offered, stock market data showed. Investors in Indian public offerings typically wait until the last day of the sale to make offers.

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