It was a very bad month for Indian billionaires

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Indian billionaires lead the losses on the Billionaires Index so far this year. This is following a massive sell-off in the Adani Group’s listed companies and in the wider Indian market. Adani’s listed companies have come under significant pressure following a short seller attack. Something is loading.

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Indian billionaires are not having a great year 2023 so far.

A sell-off in the listed companies of Gautam Adani – India’s richest man – following a shocking report on short sellers, is rippling through markets across the country.

The Adani Group’s listed companies have lost more than $68 billion in market capitalization since Hindenburg Research, a US short seller, released a scathing report last Tuesday alleging “a brazen stock manipulation and accounting fraud scheme”. within the Adani group. Adani Enterprises, the flagship of the conglomerate, has lost more than 25% of its market value this year alone.

The rout sent Adani’s net worth plummeting to $36.1 billion this year so far, propelling him to the top loser spot on the Billionaires Index. The Indian industrialist also disappeared from the list of the 10 richest people and is now the 11th richest person in the world – slipping from fourth position last week.

The Adani group defended vigorously, but Hindenburg also doubled their initial report.

Adani is still the richest Asian in the world, but his loss of wealth shows the extent of the losses in Indian markets – which have trickled down to his fellow billionaires.

Behind Adani on the Billionaires Index are fellow Indian billionaires Mukesh Ambani, Radhakishan Damani and Savitri Jindal, who have lost around $5 billion, $2 billion and $1 billion so far this year. Their net worth is declining due to falling stock prices of companies in which they hold large stakes.

Ambani is the chairman and majority shareholder of Reliance Industries, a conglomerate, while Damani is the founder of Avenue Supermarts. Shares of both companies have posted losses this year so far.

Share prices of most Jindal companies in its steel and energy conglomerate are also down this year.

The drama surrounding the Adani Group has hit general market sentiment in the South Asian market – India’s benchmark, the Sensex, is down more than 2% so far this year.

“Allegations of fraud at one of India’s most valuable conglomerates, the Adani Group, has accelerated the expected decline in Indian stocks as foreign investors rebalance their portfolios as China reopens,” said Shumita Deveshwar, chief economist for India at macroeconomics consultancy TS Lombard, wrote in a Monday note seen by Insider.

Investors are bound to step up their scrutiny of Indian stocks, Deveshwar added, but the country’s corporate governance measures rank better than most emerging markets, including Saudi Arabia, China and Brazil, according to a November 2022 report from TS Lombard.

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