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Adani’s Tumbling Stocks Might Be Weighing on India’s Stock Market

Gautam Adani’s conglomerate has lost more than $60 billion in market value since Hindenburg’s allegations were made last week.

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AFP via Getty Images

Shares of companies linked to Gautam
India’s richest person, have been tumbling following allegations from a short seller, allegations Adani has denied. The selloff, though, could have an impact on the broader Indian stock market.

Stocks linked to Adani, including
Adani Total Gas
(ATGL.India) and Adani Green Energy (ADANIGREEN.India), have slumped since Hindenburg Research released a short seller report about the Indian billionaire’s companies.
Adani Enterprises,
his energy and infrastructure group, published a 413-page response on Sunday—it called the allegations “nothing but a lie.” Adani Enterprises didn’t immediately respond to Barron’s request for further comment on Monday.

The selling continued on Monday, however, and has lowered the market value of the seven companies in the group by around $64 billion, FactSet data showed. In fact, Adani stocks have slumped so much that they appear to be weighing on the Indian stock market, according to Gavekal Research. The MSCI India Index has fallen 3.4% since the report was released on Jan. 24, while the MSCI Emerging Markets Index has gained 1.2%.

That wouldn’t be a big deal, except that India had a much better year than emerging markets as a whole in 2022. The
iShares MSCI India ETF
(INDA) fell just 9% last year, while the
iShares MSCI Emerging Markets ETF
(EEM) dropped 21%. Indian stocks also trade at a premium to emerging markets, with the India ETF trading at 21.4 times to the Emerging Market ETF’s 12.5 times.

And that valuation differential alone might be enough for investors to consider how much exposure they want to India stocks, Gavekal said.

“Whether the allegations of fraud at the Adani Group prove well founded or
not, expect them to lead to closer scrutiny of Indian asset valuations,” wrote Gavekal’s Udith Sikand.

Something always does.

Write to Brian Swint at


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