The Adani Group has surged ahead as the shares of its leading firm Adani Enterprises gained 2500 per cent value in five years. It's not an ordinary conglomerate, since Adani now controls major airports, is securing highway contracts, has a majority of coal import orders from NTPC, and influences the supply chain through ports. So when the behemoth with interests in almost every sector lost market capitalisation, it was bound to spread gloom in Indian markets.
Sensex opened 1,000 points lower and closed well into the red zone, days after the Hindenburg report accusing Adani of fraud sent the group's share prices tumbling down. Apart from investors of seven listed Adani firms losing more than Rs 4 lakh crore, banking stocks have also taken a hit despite a reassurance by Credit Lyonnais Securities Asia (CLSA). The credit rating firm CLSA has observed that Adani only represents 0.5 per cent of the total loans given out by the Indian banking sector.
Before the week came to an end for BSE, the bloodbath on Dalal Street left investors poorer by more than Rs 8 lakh crore, as it went down by as much as 1,100 crore during the day. The fear of exposure to Adani Group's firms, affected public sector banks the worst, as their stocks crashed despite outperforming markets for the past several months.
Following a freefall for the port to power conglomerate Adani, another major Indian behemoth, Mukesh Ambani's Reliance Industries also lost 15 per cent in stock value. Tata Group remained a saving grace for the market in turmoil, carried through the rocky terrain by its automobile arm's positive results.
As Hindenburg's report has been endorsed by a major investor in the US, Adani's fortunes may be dented even more, since Ebix had suffered a 35 per cent loss in value when it had been hit by Hindenburg's allegations last year.
