An Activist Investor's Allegations Have Absolutely Obliterated Gautam Adani's Fortune Over The Last Two Weeks

By on February 6, 2023 in ArticlesBillionaire News

Gautam Adani is an Indian billionaire. He earned his fortune as the founder of the Adani Group, which he founded in the late 1980s. In addition to being the largest operator of ports in India, the Adani Group is a conglomerate with interests in agriculture, beverages, defense, media, sports teams and more. Gautam Adani owns 75% of the Adani Group, which is publicly traded as Adani Enterprises LTD. At times that 75% stake has made Gautam the richest person in India and, in recent months, one of the richest people in the world.

Like many billionaires, Guatam Adani's fortune has absolutely rocketed post-COVID. Before COVID, Gautam's net worth had hovered around $9 billion for about a decade. At the lowest point in March 2020, when no one knew what COVID was going to do to the world, his fortune sank down to $5.5 billion. Within a year his fortune had increased 10-fold to $50 billion.

Fast forward another year and in April 2022 Gautam's fortune topped $100 billion for the first time. Just a few weeks later his $120 billion fortune made Gautam one of the five richest people in the world, behind only Bill Gates, Bernard Arnault, Jeff Bezos and Elon Musk.

On September 22, 2022, Adani's $147 billion net worth meant he surpassed Jeff Bezos to become the world's second-richest person.

Gautam's net worth started 2023 at around $120 billion and stayed roughly in that range until January 25. And then it blew up.

(SAM PANTHAKY/AFP via Getty Images)

Blown Up Like The Hindenburg

… by a company called Hindenburg Research.

On January 24, a short-selling investor called Hindenburg Research released a report which alleged that the Adani Group has been engaging in "brazen" stock manipulation and accounting fraud. As if that wasn't bad enough, Hindenburg claimed that Adani-family controlled offshore companies were used to facilitate money laundering, corruption and theft.

One of the central allegations claimed that the Adani-controlled offshore companies manipulated the parent company's stock price by buying large swaths of shares.

The allegations dropped a bomb squarely on Adani's companies. Within a week, over $100 billion was shaved from Adani Enterprises' market cap. The fallout was so powerful that a broader Indian stock index dropped 9%, month over month.

Adani was quick to dispute the shocking allegations, describing Hindenburg's report as a "calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India." Unfortunately, his fierce protestations have not helped… so far. In a follow up reply, Hindenburg accused Adani of side-stepping the actual allegations it had put forth.

The damage to Adani's personal fortune has been severe. As I type this article, Gautam Adani is no longer the world's second richest person. He's not in the top 10. He's not even in the top 20. He's also no longer the richest person in India. That honor now goes to Mukesh Ambani. As of this writing, Gautam Adani's net worth is…

$55 billion

That makes him the 21st richest person on the planet. For now.

Obviously being worth $60 billion is certainly still a massive amount of money, but no one is quite sure where and when the bleeding will stop. In the last two weeks alone more than $65 billion has been shaved from Adani personally. And compared to his peak net worth from September, roughly $95 billion in personal wealth has evaporated. If investors continue to lose confidence and if lenders begin to question Adani companies credit worthiness, some think the situation could turn into a vicious cycle.

Get out your popcorn!

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