After US Hindenburg Research alleged that Adani Group was engaged in share manipulation and accounting fraud, approximately $118 billion was wiped from the market value of 10 shares of the cluster. This meltdown was one of the biggest losses ever seen in the Indian Stock Exchange.
LGT Capital Partners Portfolio Manager Willem Glorie, who made a statement to Bloomberg HT and closely monitors the shares of the cluster, evaluated how Adani Group has affected the Indian stock market and how the market will react to this sensation in the future.
“stock prices looked too expensive on multiple metrics”
Commenting on the foundations of Hindenburg’s arguments about the cluster owned by Gautam Adani, one of the fastest prospering business people in the world, Glorie said that in recent years, questions have been raised frequently about Adani Group’s valuations and general debt levels, and that Adani Group’s 413 He said that the one-page defense statement strengthened the thesis rather than refuted it.
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Glorie stated that many questions in Adani Group’s 413-page defense text remained unanswered. Even before the report was published, it was difficult to base stock valuations in the cluster. Therefore, continued volatility in the bonds and shares of the cluster can be expected.” said.
On the other hand, belonging to Adani Ports & SEZ Ltd, Glorie said, “The fundamentals are quite solid” and that the company has a strategic asset base that has not changed even after Hindenburg’s report.
Losses exceeded 50%.
Looking at the general outlook, we can say that the collapse in Adani Group got worse this week.
Some shares have lost more than 50 percent since Hindenburg’s report was published, including the 60 percent decline of Adani Enterprises. In fact, it was stated that since some banks no longer accept the Group’s securities as collateral in trading, the struggling businessman Adani started to negotiate with creditors to pay off some loans backed by pledged shares in advance.
It was a matter of great curiosity how the sensation experienced in Adani Group would affect the Indian stock market in the future.
Evaluating how this sensation might affect American and European investors who are planning to invest in India, Glorie said that investors are likely to do more scrutiny for sure investments in India in the future, so there may be a measure contagion effect in the short to mid-mid range.