Gautam Adani Tops Asia’s Richest List Again

Gautam Adani, the chairman of the Adani Group, has once again claimed the title of Asia’s wealthiest person, overtaking Mukesh Ambani, the chairman of Reliance Industries, according to the Bloomberg Billionaires Index. Adani’s net worth of USD 111 billion now positions him as the 11th richest individual globally, surpassing Ambani’s wealth of USD 109 billion, which places him at number 12 on the index.

Reclaiming the Title

The shift comes as a result of a surge in the stock prices of Adani Group’s listed companies, post exit polls, propelling Adani to the top spot-on Asia’s billionaire list.

The significant increase in Adani’s net worth reflects the market’s confidence in the group’s ambitious expansion plans, which include a planned USD 90 billion capital expenditure over the next decade. Despite facing challenges in 2023, due to a Supreme Court inquiry triggered by allegations outlined in the Hindenburg report, the Adani Group has made a remarkable comeback. This resurgence follows a period of strategic focus on debt containment, the reduction of founder share pledges, and the consolidation of core business competencies, resulting in a five-year compound annual growth rate (CAGR) of profit growth at 54%.

Hindenburg Adani Report and Events Timeline

On January 24, 2023, US activist investor Hindenburg Research published a report alleging that the Adani Group was engaged in brazen stock manipulation and accounting fraud over the course of decades. Following this, shares of Adani Group companies lost over Rs 80,000 crore (USD 9.64 billion) in market capitalization. Before the report, the listed Adani firms had a market cap of USD 218 billion, which plummeted to a combined market value of USD 108 billion afterward. Consequently, Adani, who was the richest Indian at the time, slipped to the 22nd spot on the Forbes Real-time Billionaire List for 2023, with Mukesh Ambani overtaking him as the richest Indian.

In November 2023, the Supreme Court of India observed that it would not be proper to appoint a Special Investigation Team (SIT) to investigate alleged violations of Minimum Public Shareholding (MPS) norms by Adani Group companies without evidence of lapses on the part of the Securities and Exchange Board of India (SEBI), which was already investigating the matter. After the Supreme Court disregarded the report submitted by Hindenburg on Adani Group, the share prices of multiple firms under the conglomerate spiked by a cumulative 18% during the early trade hours of Wednesday. Siddharth Luthra, the advocate of Adani Group, stated that since the Supreme Court found no issues in 20 out of 22 transactions, it effectively gave a clean chit to Adani.

As a result, Adani’s net worth rose to USD 111 billion, positioning him as the 11th richest individual globally, surpassing Ambani’s wealth of USD 109 billion, which placed him at number 12 on the index.

Market Response to Exit Polls: Adani Group Stocks Surge

As a result of exit polls, Adani Group stocks have added nearly Rs 3 lakh crore at the start of trade, bringing their overall market capitalization to nearly Rs 20 lakh crore. This approaches the Rs 24 lakh crore market capitalization the group had before the release of the Hindenburg Research report.

Political and Economic Context:

These developments coincide with positive exit poll results for the ruling NDA in India’s general elections, suggesting a favorable outcome for the incumbent government, which has close ties with the Adani Group. Adani’s resurgence marks a significant turnaround from the challenges faced in 2023.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.