Amit Dave/Reuters
- Gautam Adani's wealth has fallen by more than a quarter over the first month of 2023.
- The Indian industrialist started the year as the world's third-richest person. He's now in 11th place.
- Adani founded the Adani Group, which was the target of a bombshell report by a short seller.
Gautam Adani's year hasn't started well.
The Indian industrialist's wealth has fallen by more than a quarter over the first month of 2023.
At the start of the year, Adani was the world's third-richest person, behind just Bernard Arnault, the CEO of Louis Vuitton and Moët owner LVMH, and Tesla and SpaceX CEO Elon Musk.
He had added $42 billion to his fortune in 2022 even as other billionaires like Musk and Amazon founder Jeff Bezos saw their fortunes stutter, and came into the new year worth around $120 billion, according to the Bloomberg Billionaires Index.
But his fortune has since plummeted to $84.4 billion, a drop of $36 billion, Bloomberg's data shows. As of January 31, he is the 11th-richest person on the planet.
Adani is founder and chairman of the Adani Group, a multinational conglomerate with businesses spanning energy, mining, ports, and airports. It owns India's largest commercial port and has a controlling stake in Mumbai's international airport.
A report by Hindenburg Research, an investment-research firm and short seller, was the catalyst for the downwards spiral of Adani's wealth. In the report, which was published last week and which Hindenburg said took two years to compile, the short-seller accused the Adani Group of a "brazen stock manipulation and accounting fraud scheme."
Shares in the group's listed businesses crashed after the report was released, and as most of Adani's wealth is derived from the large stakes he has in these companies, his wealth plummeted.
According to Bloomberg, he holds close to 75% stakes in Adani Enterprises, Adani Power, and Adani Transmissions. Share prices for both Adani Enterprises and Adani Power have dropped by around a quarter since the start of January, while Adani Transmissions' share price has fallen by an even larger amount.
The Adani Group has said it is exploring legal action against Hindenburg and released a 413-page report which said that Hindenburg's claims were "nothing but a lie." It called Hindenburg's document a "malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations."
"It is tremendously concerning that the statements of an entity sitting thousands of miles away, with no credibility or ethics has caused serious and unprecedented adverse impact on our investors," the conglomerate added.
Hindenburg criticized the group's response, saying that it failed to address many of its questions.
Adani began 2022 in 14th place on the world rich list. Soaring energy prices and a string of acquisitions, including a port in Israel and a hostile takeover of Indian broadcaster NDTV, boosted his fortune over the course of the year, Bloomberg reported.
Adani was worth just $10 billion as recently as June 2020, but data from the Bloomberg Billionaires Index shows he hit the $100 billion threshold in April 2022 and his fortune ballooned to $150 billion in September, before falling slightly.
His rise in fortune in 2022 was in stark contrast to the downturns experienced by many other members of the business elite. Musk's wealth crashed by nearly $140 billion, Amazon founder Jeff Bezos shed around $85 billion, and Alphabet cofounder Larry Page slumped by roughly $45 billion.
Adani is the richest Indian on the Bloomberg list, just ahead of Mukesh Ambani, whose wealth is estimated at $82.2 billion as of January 31. Ambani controls Reliance Industries, another multinational conglomerate.
From diamond sorter to tycoon
Adani was born in Ahmedabad, in the Indian state of Gujarat, in 1962. He dropped out of university after his second year studying commerce, according to Silicon India. He then turned to the diamond industry, first as a sorter and then as a trader in Mumbai, the publication reported.
After his brother purchased a plastic company, Adani started working with him and began importing PVC, per Bloomberg. In 1988, he set up Adani Enterprises.
The Adani Group comprises seven listed companies with a combined 23,000 staff. As of late December, the companies were worth $166 billion, though that was down from $242 billion in August.
A profile on the Adani Group website says Adani aims to make India a significant player in sustainable energy, and self-reliant in defence and security.
Adani said he and a companion were kidnapped in 1998 by a group of armed men. A police report said the kidnappers demanded a $2 million ransom and released the pair after the sum was paid, per The Indian Express. Eight people accused of the kidnapping were ultimately acquitted, Times Now India reported.
Adani was dining at the Taj Mahal Palace Hotel during the 2008 Mumbai terrorist attacks. He told India Today that from his table, he could see gunmen entering the hotel and hid in its basement.