Photo credit should read SAM PANTHAKY/AFP via Getty Images
- Indian billionaires are leading losses on the Bloomberg Billionaires Index so far this year.
- That's on the back of a massive selloff in Adani Group's listed businesses and the broader Indian market.
- Adani's listed companies have come under significant pressure following a short-seller attack.
India's billionaires are not having a great 2023 so far.
A massive selloff in the listed companies of the Gautam Adani — India's richest man — following a shocking short-seller report, is spilling over into the country's markets.
Adani Group's listed companies have lost more than $68 billion in market capitalization since Hindenburg Research, a US short seller, released a scathing report last Tuesday alleging "brazen stock manipulation and accounting fraud scheme" at the Adani Group. Adani Enterprises, the conglomerate's flagship has lost over 25% in market value this year alone.
The rout has pummeled Adani's net worth, which is down $36.1 billion this year so far — propelling him into the spot of top loser on the Bloomberg Billionaires Index. The Indian industrialist has also fallen off the list of the top 10 wealthiest people and is now the world's 11th richest person — slipping from the fourth position just last week.
The Adani Group has been defending itself vigorously, but Hindenburg's also doubling down on it's initial report.
Adani is still the world's richest Asian, but his wealth wipeout shows the extent of losses in the Indian markets — which has spilled over to his fellow billionaires.
Trailing Adani on the Bloomberg Billionaires Index are fellow Indian billionaires Mukesh Ambani, Radhakishan Damani, and Savitri Jindal, who have lost about $5 billion, $2 billion, and $1 billion so far this year. Their net worth is down on the back of falling share prices in the companies they hold large stakes in.
Ambani is the chairman and majority shareholder of Reliance Industries, a conglomerate, while Damani is the founder of Avenue Supermarts. The stock of both companies have posted losses this year so far.
Share prices of most of Jindal's companies in her steel and power conglomerate are also down this year.
The drama surrounding the Adani Group has hit overall market sentiment in the South Asian market — India's benchmark index, the Sensex, is down over 2% so far this year.
"Allegations of fraud at one of India's most valuable conglomerates, the Adani Group, have hastened the decline we expected in Indian equities as foreign investors rebalance their portfolios on China's reopening," Shumita Deveshwar, the chief economist for India at macroeconomic consultancy TS Lombard, wrote in a Monday note seen by Insider.
Investors are bound to intensify their scrutiny of Indian stocks, Deveshwar added, but the country's corporate governance metrics rank better than most emerging markets including Saudi Arabia, China, and Brazil, according to a November 2022 report from TS Lombard.