Adani group got “seriously over-leveraged,” it’s worth dropped by 94,000 crore. Want to know how, scroll below!
Fall in stock prices of Adani
The stock prices of all seven Adani group firms fell sharply today after a CreditSights analysis revealed that the company is “seriously over-leveraged,” alarming investors.
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Adani Group firms lost more than 94,000 crore in value during today’s first half of trade, with Adani Green suffering the worst losses.
Gautam Adani’s Wealth
According to the research, debt is what has allowed Gautam Adani to soar to the top of India and become Asia’s richest man. In contrast to today, when he is now valued at $136 billion, according to the Bloomberg Billionaires Index, his entire fortune was a pitiful $10 billion two years ago.
According to the research, Gautam Adani’s wealth is mostly made up of “paper riches.” The value of his stock holdings contributes to his inclusion on the list of the richest persons.
According to the article, this debt may cause Adani’s vast economic empire to collapse.
Analysis of CreditSights
The analysis from CreditSights warned that excessively ambitious debt-funded expansion plans might ultimately spiral into a big debt trap and could result in a distressed position or default of one or more group firms.
Although it may seem depressing, the report’s assessment of two Adani group companies—Adani Green and Adani Ports & SEZ—remained “market perform.”
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The research continued by highlighting the business’s rivalry with Reliance Industries and the risk of low equity injection while noting that the Adani group can benefit from the Indian government’s significant infrastructure spending.
The government has approved a National Infrastructure Pipeline initiative with an initial budget of 111 lakh crore, which is planned to be spent between 2020 and 25.
CreditSights, a Fitch group firm, said that it was “comforted” by the organization’s good access to a variety of funding sources and relatively secure infrastructure assets that provide recurring revenue.
The group’s largest transaction was the $10.5 billion (about 83,000 crore) purchase of ACC and Ambuja Cements from Holcim.
Profit from 2020 till date
Although the Adani Group firms have experienced a significant decline today, investors who placed money into the Adani empire in 2020 have seen enormous gains; even with the current decline. If you had invested 1 lakh in Adani Groups it would have been 7 lakh now.