Adani Total Gas hit hardest by $132-billion rout, but no relief in sight

Since the explosive Hindenburg Research report, the market value of Adani Group stocks has lost more than $132 billion, but none has been hammered more than the Adani Total Gas Ltd.

Since the short seller report was released on January 24th, the company's shares have lost more than three-quarters of their value. According to a Bloomberg report, the stock had previously been the most highly valued in the group and also had a relatively low liquidity level.

Hindenburg estimated that, on average, the value of seven of the conglomerate's shares was inflated by 85 per cent.

In the opening hours of trade on Monday, Adani Total was down to its limit. Since January 27, according to data gathered by Bloomberg, it has done so every day. As the selloff grew worse, Indian markets changed the daily cap for the stock to 5 per cent from 20 per cent.

Moneycontrol quoted Abhay Agarwal, a fund manager of Piper Serica Advisors Pvt., as saying that Adani Total Gas "is under fundamental as well as technical pressure, which has led to the decline." The problems peculiar to the company have increased, and the decline in European gas prices "will put pressure on the profitability," he warned.

Even while the equities market shock from claims of stock manipulation and accounting fraud made by Hindenburg is beginning to subside, concerns regarding the Adani Group's access to foreign financing continue. Investors are still concerned about Gautam Adani and his firms' debt and cashflow levels despite their efforts, which range from loan repayment to promises to lower leverage ratios.

A multi-billion dollar plan to manufacture green hydrogen with Adani Group was put on hold following the publication of the Hindenburg report, which was a setback for the gas unit of the French energy giant TotalEnergies SE.

As per an exchange filing, the business will have combined maturing debt obligations in the fourth quarters of its fiscal years 2023 and 2024 that are greater than its cash balance. But it also has Rs 9.32 billion in cash flow from assets.

According to statistics gathered by Bloomberg, the stock's float, or the portion that is available to trade on the open market, is around 19 percent. That it reported was the lowest in the group, following Adani Wilmar Ltd. MSCI Inc. decreased the amount of the company's freely tradable shares in its most recent quarterly index review, although the implementation has since been postponed.