Too suddenly! The net worth of Asia's richest man shrank by 180 billion yuan in a single day, and its listed companies fell by 330 billion yuan

National Business Daily

2024-06-06 09:52Published on the official account of Sichuan Daily Economic News

Edited by: Bi Luming

Asia's richest man suffered an epic plunge.

Recently, India's "three kills of stocks and bonds" have caused India's super-rich man, Gautam Adani, to suffer heavy losses. Adani Group's listed companies have plummeted for days, and their market value has evaporated by 45 billion US dollars (about 330 billion yuan) in just one day.

Under the plunge, Adani also recorded the largest one-day loss in the history of Asian billionaires, with a net worth of 25 billion US dollars, or about 180 billion yuan, in one day. This also caused Adani to lose the throne of the richest man in Asia, and his net worth shrank to 97.5 billion US dollars (about 710 billion yuan). Specifically, all 10 stocks of the Adani Group collectively plummeted, and the flagship company Adani Enterprises plunged 19% in a single day, erasing almost all gains since 2024.

Some analysts have pointed out that the main reason for Adani's epic plunge may be that the market believes that the fate of his conglomerate is closely linked to the prospects of Indian Prime Minister Narendra Modi's administration. According to the latest news, in the Indian general election, because the ruling Bharatiya Janata Party (BJP) did not win more than half of the 272 seats, the BJP must form a coalition with its political coalition. This is the first time during Modi's tenure that the BJP is facing a situation where it cannot form a government alone, and the "Modi 3.0" government may face great pressure.

India's super-rich Gautam Adani. Image source: Visual China

Why the Adani Group plummeted

According to the Securities Times, the Adani Group's relationship with the Modi government has been very ambiguous. Some analysts have pointed out that the main reason for Adani's sudden and epic plunge may be that the market believes that the fate of his conglomerate is closely linked to the prospects of Indian Prime Minister Narendra Modi's administration.

In response, the Adani Group and its founders have always insisted that they have no improper relationship with the Modi government and that the group can implement ambitious infrastructure projects under any government.

According to public reports, Modi and Adani both hail from the western Indian state of Gujarat and rose to prominence together, and the two have become closer. The Adani Group's business is closely linked to Modi's nation-building priorities in infrastructure, green energy, defence and digital services. Adani has now become the "hegemon" of the Indian business community. In 1988, he founded Adani Exports Ltd, which has since grown into the Adani Group.

Currently, the Adani Group controls India's largest private ports, airport operators, city gas distributors and coal mines, as well as real estate, insurance and other sectors. Among them, the coal business is one of the core businesses of the Adani Group, which almost monopolizes the import trade of Indian coal, with a market share of more than one-third. The group has pledged to invest $100 billion over the next decade in the green transition.

According to Forbes, the Adani Group has more than 200 ports, airports, power stations, cement plants, mines, defence plants, renewable energy farms, power facilities and natural gas distribution networks, with operations in 23 states and territories in India, accounting for 87% of India's land area.

Adani's net worth was once as high as $155.6 billion (September 2022), ranking second in the world, second only to Musk. However, in 2023, Adani will encounter a short-selling turmoil, and his net worth will plummet, and he once lost his position as the richest man in Asia and the richest man in India. However, according to the Bloomberg Billionaires Index, Adani's net worth rebounded to US$97.6 billion (about 700 billion yuan) in January this year, regaining the throne of "Asia's richest man".

It is worth mentioning that Adani was once a hot topic in the Indian general election. Opposition leaders often mention his name at campaign rally. A group of advisers asked Adani not to post anything about the preliminary election results on social media and advised him to remain silent until a new federal government is formed, the media quoted sources familiar with the matter.

Will the Indian stock market continue to improve?

According to media reports, although hit by short-term invoicing results that were less than expected, the vast majority of industry insiders interviewed by reporters since the beginning of this year have continued to be optimistic about the Indian stock market in the medium to long term.

Brian Burrell, fund manager of Shangbo Investment Management Company, told the first financial reporter that fundamentally, India has a very large population base and entrepreneur population, and some companies can recruit more young people to improve corporate profitability and income. Therefore, the basic situation of the Indian economy and stock market is very optimistic for many years to come.

Chen Dong, chief strategist and head of research at Pictet Wealth Management in Asia, also told the first financial reporter that the Indian stock market is performing very well, and in the final analysis, it is supported by fundamentals. "On the one hand, India's economic growth is now the largest among the world's major economies." "On the other hand, corporate earnings do continue to grow at double-digit rates, and major companies have outperformed expectations. ”

Albert Kwok, managing director and emerging market equity portfolio manager at Jennison Associates of Prudential Global Investment Management (PGIM), also recently told reporters that the strength of the Indian stock market is driven by a combination of fundamental and technical factors.

Fundamentally, India remains one of the world's fastest-growing economies, and growth is largely driven by investments that investors are bullish on. At the same time, the ability of the RBI and the government to curb inflation through monetary policy and supply-side reforms has also boosted investor confidence.

Technically, the introduction of the Systematic Investment Plan (SIP) has also boosted domestic capital flows and domestic investor participation in the Indian stock market. The development of the local mutual fund industry has made the Indian stock market less susceptible to foreign capital flows, which are often very sensitive to Fed actions.

As for the short-term impact of the election, Kwok believes that like any other election impact, the election will always cause "noise and volatility" in the market. However, unless there is a major accident, the BJP will continue to govern, and based on this, various economic reforms, fiscal policies and other policies will also have continuity. Bu Weijie said that India's way of supporting the domestic economy is usually through increased infrastructure spending, so that the investment will be sustained for several years, so the election should continue to bring upside potential for the Indian stock market.

The daily economic news integrates the first financial and securities times

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