Adani stocks slump up to 20% despite FPO success as concerns linger

Adani group

Most Adani Group stocks slumped on February 1 as concerns on the stock volatility continued despite its flagship Adani Enterprises successfully closing Rs 20,000-crore follow-on public offering (FPO) yesterday. The rout in the conglomerate's biggest companies have  now deepened to $84 billion.

Adani Enterprises crashed over 26 percent to close at Rs 2,180.20 apiece on BSE amid report that Credit Suisse has stopped accepting bonds of Adani companies as collateral for margin loans. Another group stock Adani Ports also hit 20 percent lower circuit to end at 492.15 apiece. The group's fall further intensified as Ambuja Cements slumped 16.56 percent to close at Rs 334.60, while ACC declined 5.96 percent to Rs 1,852.

Adani Transmission  closed 2.46 percent lower at Rs 1,730.25, Adani Green Energy was down 5.78 percent at 1,153.35, Adani Total Gas hit a lower circuit of 10 percent at Rs 1,901.65. Adani Power also hit its 5 percent lower limit at Rs 212.75.

According to the Bloomberg's report citing sources, the Swiss lender’s private banking arm has assigned a zero lending value for notes sold by Adani Ports and Special Economic Zone, Adani Green Energy and Adani Electricity Mumbai Ltd.

Though the FPO was fully subscribed, retail investors seem to have taken a backseat as the stock price has slid below the FPO price band.

Adani Enterprises is expected to announce the final price for its offering later in the day.

Last week, Adani group shares were hammered after an American short seller, Hindenburg Research, accused the company of using tax havens and flagged debt concerns in a report. In a 413-page rebuttal, the Adani group denied all charges.

A Bloomberg report has said that amid the pounding in the Adani Group stocks, the company has put up millions of dollars worth of shares to maintain its collateral cover on a $1 billion loan.

Adani on January 27 added about $300 million worth of shares for a loan made by a group of banks including Barclays Plc, Bloomberg reported citing source.

 MSCI has put out a consultation paper to decide on how they treat the Adani stocks, which are part of its Global Standard Index amid the freefall in the shares.

“Aware of the reports recently published regarding the Adani Group and associated securities. Will announce to all clients simultaneously if there are any changes to MSCI indexes,” it said.