Shares in Indian tycoon Gautam Adani’s conglomerate plunged again on Wednesday as a rout in his companies deepened to $86bn in the wake of a US short-seller report, with the billionaire also losing his title as Asia’s richest person.
Wednesday’s stock losses saw Adani slip to 15th on Forbes rich list with an estimated net worth of $75.1bn, below rival Mukesh Ambani, the chairman of Reliance Industries Ltd who ranked ninth with a net worth of $83.7bn.
The losses mark a dramatic setback for Adani, the school-dropout-turned-billionaire whose fortunes rose rapidly in recent years in line withthe stock values of his businesses that include ports, airports, mining, cement and power. Now, the tycoon is fighting to stabilise his companies and defend his reputation.
The share slides came just a day after the Adani Group managed to muster support from investors for a $2.5bn share sale for flagship firm Adani Enterprises, in what some saw as a stamp of investor confidence at a time of crisis.
The group has denied the 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 the necessary regulatory disclosures, it added.
Shares in Adani Enterprises, often described as the incubator of Adani businesses, plunged 28 percent on Wednesday, bringing its losses since the Hindenburg report to more than $18bn. Adani Ports and Special Economic Zone dropped 19 percent. Both stocks marked their worst day ever.
“The kind of fall that we are seeing in Adani stocks is scary,” said Avinash Gorakshakar, head of research at Mumbai-based Profitmart Securities.
Adani Power and Adani Wilmar fell 5 percent each, and Adani Total Gas slumped 10 percent, with all three falling by their daily price limits. Adani Transmission was down 3 percent and Adani Green Energy was down 5.6 percent.
Adani Total Gas, a joint venture with France’s Total, has been the biggest casualty of the short-seller report, losing about $27bn.
Dollar bonds issued by Adani entities also resumed their slide on Wednesday. The US dollar-denominated bonds of Adani Ports maturing in February 2031 led the losses, falling 3.59 cents to 67.58 cents.
Underscoring the nervousness in some quarters, Bloomberg reported that Credit Suisse had stopped accepting bonds of Adani group companies as collateral for margin loans to its private banking clients.
Deven Choksey, managing director of KR Choksey Shares and Securities, said this was a big factor in Wednesday’s share slides.
Credit Suisse had no immediate comment.
After losing $86bn in recent days, equivalent to 16 percent of India’s annual budget spend of $550bn announced on Wednesday, the seven listed Adani Group entities now have a combined market capitalisation of about $131bn.
Confidence damaged
“There was a slight bounce yesterday after the share sale went through, after seeming improbable at a point, but now the weak market sentiment has become visible again after the bombshell Hindenburg report,” said Ambareesh Baliga, a Mumbai-based independent market analyst.
“With the stocks down despite Adani’s rebuttal, it clearly shows some damage on investor sentiment. It will take a while to stabilise,” Baliga added.
Asked whether he was concerned about wider losses on India’s equity markets because of the plunge in Adani Group shares, economic affairs secretary Ajay Seth said the government “does not comment on issues related to a particular company”.
India’s benchmark Nifty index has fallen 2.7 percent since the Hindenburg report. Data also shows that foreign investors sold a net $1.5bn worth of Indian equities after the Hindenburg report – the biggest outflow over four consecutive days since September 30.
Scrutiny of the conglomerate is stepping up, with an Australian regulator saying on Wednesday it would review Hindenburg’s allegations to see if further enquiries were warranted.
India’s markets regulator, which has been looking into deals by the conglomerate, will add Hindenburg’s report to its own preliminary investigation, sources have told Reuters. The regulator has not commented on the Adani-Hindenburg saga.
Indian credit rating agency ICRA Ltd, a unit of Moody’s Investors Service, said on Wednesday it was monitoring the impact of the developments on its rated portfolio in Adani Group. It added that while the group’s large debt-funded capital spending plan was a “key challenge”, some of it was discretionary in nature and could be deferred, depending on the liquidity position.
India’s state-run Life Insurance Corporation (LIC) said on Monday it would seek clarifications from Adani’s management on the short-seller report. LIC owned a 4.23 percent stake in Adani Enterprises as of end-December and more than 9 percent in Adani Ports and Special Economic Zone. The insurance giant was also a key investor in Adani’s recent share sale.
Shares in cement firms ACC and Ambuja Cements, which Adani Group bought from Switzerland’s Holcim for $10.5bn last year, fell 6.2 percent and 16.7 percent, respectively.
Hindenburg said in its report it had shorted US bonds and non-India traded derivatives of the Adani Group.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
