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The (notional) rise & fall in wealth of Gautam Adani, Asia’s 2nd richest after Mukesh Ambani

Shares of six Adani Group companies crashed Monday wiping out more than $6 billion of the companies’ market capitalisation and bringing down Gautam Adani’s net worth. 

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New Delhi: The shares of Adani Group companies plunged Monday after reports that accounts of three foreign portfolio investors (FPIs), who had substantial investments in these companies, had been frozen.

This effectively wiped off over $6 billion of the group chairman Gautam Adani’s wealth, just days after he became the second richest man in Asia after Mukesh Ambani, Chairman of Reliance Industries.

Adani’s rise in net worth was fuelled by a phenomenal rise in the market capitalisation of Adani Group companies led by a sharp increase in share prices of its listed firms. 

Last week, a Bloomberg analysis pointed out that Adani added over $43 billion taking his net worth to $77 billion in 2021, catapulting him ahead of Chinese billionaire Zhong Shanshan, who heads a bottled water company in China. A massive increase in share prices of these stocks had led analysts to question if the shares were overvalued.

But at the end of the day, the market capitalisation of Adani Group’s companies will keep changing based on stock price movement. The gains or losses from shares and the wealth projected are all notional until Adani chooses to sell these shares to book profits or losses as the case may be.

For instance, after Adani’s net worth fell by more than $6 billion in a single day Monday, pulling down his net worth to around $71 billion from $77 billion last week, stocks of the companies rebounded and recovered some of its notional losses Tuesday with Adani’s net worth improving to $73 billion.

This came after the company informed the stock exchanges that the accounts of the FPIs were not frozen, according to communication received by it from the National Securities Depository Limited (NSDL), a securities depository body. 

Despite the plunge in share prices, Adani remains the second richest Asian after Ambani as of 15 June, the Bloomberg Billionaires Index shows.

Ambani’s net worth has also increased substantially over the last one year, with Reliance Industries’ share price surging due to massive foreign direct investments into Jio Platforms, a subsidiary of Reliance Industries. 

Bloomberg data shows that Ambani added more than $30 billion to his net worth over the last one year taking his net worth to over $86 billion. 

Share price of Reliance Industries rose 110 per cent since April 2020 taking its market capitalisation to Rs 14.26 lakh crore. The promoter group led by Mukesh Ambani holds 50.58 per cent of the company’s shares, according to the shareholding pattern available on Bombay Stock Exchange’s website. 

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Adani’s holdings

The Adani Group has six listed companies, according to data available with the BSE. These companies are Adani Enterprises Ltd, Adani Ports and Special Economic Zone Ltd, Adani Power Ltd, Adani Transmission Ltd, Adani Green Energy Ltd and Adani Total Gas Ltd. 

The promoter group led by Gautam Adani and his family members hold 74.92 per cent of the total shares in Adani Enterprises Ltd, a company with a market capitalisation of Rs 1.68 lakh crore as of 15 June.

In Adani Ports, the promoter group holds nearly 64 per cent of the shares. The company’s market capitalisation was at Rs 1.54 lakh as of 15 June. In Adani Power Ltd, the promoter group holds nearly 75 per cent of the shares. The company’s market capitalisation was at Rs 51,644 crore. 

In Adani Transmission Ltd, the promoter group holds 74.92 per cent. The market capitalisation of the company is around Rs 1.58 lakh crore. 

In Adani Green Energy, the promoter group has 56 per cent of the total shares. With a market cap of Rs 1.89 lakh crore, this is one of the most valued companies of the Adani Group. In Adani Total Gas, a company with a market capitalisation of Rs 1.61 lakh crore, the promoter group had 74.8 per cent of the total shares. 

The ups and downs in share prices

All six Adani group companies have seen a huge surge in their share prices over the last one year adding to Gautam Adani’s wealth. 

As of 15 June, the shares of Adani Transmission were up 582 per cent and Adani Total Gas’ share price was up 975 per cent over the last one year. This is despite the fact that these stocks have hit the lower circuit on both Monday and Tuesday. 

The group’s flagship firm — Adani Enterprises — also saw its share prices rise 952 per cent over the last one year. The Benchmark Sensex rose 57 per cent during the same period. 

The other three Adani firms also saw their share prices surge but by a relatively lower percentage. 

While Adani Ports’ prices surged 123 per cent over the last year, Adani Green Energy was up 233 per cent and Adani Power was up 266 per cent.

Monday, however, saw carnage among the Adani stocks. The stock of Adani Group companies hit the lower circuit falling by 5 per cent Monday. 

However, shares of two companies recovered marginally Tuesday, with Adani enterprises up 2.45 per cent and Adani Green Energy up 2.79 per cent. 

But this positive sentiment was restricted to only these two stocks. Stocks of Adani Power, Adani Transmission and Adani Total Gas Ltd hit the lower circuit again Tuesday, falling five per cent from Monday’s closing price.

(Edited by Arun Prashanth)

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