Indian billionaire Gautam Adani’s dream run up the global wealth rankings is faltering after a media report raised questions about some offshore investors. The news triggered a stockmarket rout in his conglomerate’s six listed stocks.
The 58-year-old tycoon has lost more money this week than anyone else in the world, with his personal fortune tumbling by about $13.2 billion to $63.5 billion, according to the Bloomberg Billionaires Index. Just days ago, he was closing the gap with Mukesh Ambani as Asia’s richest man.
The U-turn in shares started Monday last week after the Economic Times reported that India’s national share depository froze the accounts of three Mauritius-based funds because of insufficient information on the owners.
The bulk of the holdings of Albula Investment Fund, Cresta Fund and APMS Investment Fund — about $6 billion — are shares of Adani’s firms. Although the Adani group called the report “blatantly erroneous” and said it was “done to deliberately mislead the investing community,” investors concerned over transparency rushed for the exit.
The Mauritius offshore funds hold more than 90% of their assets under management in Adani group companies, according to Bloomberg Intelligence. These overseas funds “have been investors in Adani Enterprises Ltd. for more than a decade,” Adani Group said in a 14 June statement. “We urge all our stakeholders not to be perturbed by market speculations.”
Shares of Adani Green Energy Ltd., the mogul’s most valuable asset, slipped almost 13% last week in Mumbai. Adani Ports & Special Economic Zone Ltd. tumbled 17%, Adani Power Ltd., Adani Total Gas Ltd. and Adani Transmission Ltd. plunged at least 22% last week, while flagship Adani Enterprises fell about 7%. Adani Ports and Adani Enterprises closed higher on Friday, paring some of the week’s losses.
Excitement around the Adani empire spanning ports, mines and power plants had been building up over the past couple of years as the coal magnate looked beyond fossil fuel for expansion, seeking to dovetail his business interests with infrastructure priorities set by Prime Minister Narendra Modi.
Investors had sent some of the group’s stocks soaring more than 500% since the start of 2020, betting the first-generation entrepreneur’s big push into sectors such as renewable energy, airports, data centers and defense contracting will pay off. Earlier this month, Adani’s wealth was close to $80 billion.