Adani loses Asia’s richest crown after $119b stock rout

Indian tycoon Gautam Adani has lost his title of Asia’s richest person as a rout in his conglomerate’s biggest companies deepened to $US84 billion ($A119 billion) following a short-seller report.

A report by Hindenburg Research last week alleged improper use by the group of offshore tax havens and stock manipulation, as well as concerns about high debt and the valuations of seven listed Adani companies.

It has heightened scrutiny of the conglomerate with an Australian regulator saying on Wednesday that it would review the allegations to see if further inquiries are warranted.

The Adani Group denies Hindenburg’s allegations, saying the short-seller’s narrative of stock manipulation has “no basis” and stems from an ignorance of Indian law. It has always made necessary regulatory disclosures, it says.

Stock losses on Wednesday saw Gautam Adani slip to 10th on Forbes rich list with an estimated net worth of $US84.1 billion, just below rival Mukesh Ambani, the chairman of Reliance Industries Ltd who has an estimated $US84.4 billion. 

Before the Hindenburg report, Adani had ranked third.

The worsening rout comes despite the group managing to muster support from investors to haul a share sale for flagship firm Adani Enterprises over the line on Tuesday.

Adani Enterprises plunged 20 per cent on Wednesday to bring its losses since the Hindenburg report to nearly $US15 billion. 

Adani Power fell five per cent, while Adani Total Gas slumped 10 per cent, down by its daily price limit.

Adani Transmission was down six per cent and Adani Ports and Special Economic Zone dropped 15 per cent.

Adani Total Gas, a joint venture between France’s energy major Total and Adani Group, has been the biggest casualty of the short-seller report, losing about $US27 billion.

Data also showed that foreign investors sold a net $US1.5 billion worth of Indian equities since the Hindenburg report – the biggest outflow over four consecutive days since September 30.

Headaches for the Adani Group are expected to continue.

India’s markets regulator, which has been looking into deals by the conglomerate, has also said it will add Hindenburg’s report to its own preliminary investigation.

State-run Life Insurance Corporation on Monday said it would seek clarifications from Adani’s management on the short seller report. 

The insurance giant was, however, a key investor in the Adani Enterprises share sale.