Adani Enterprises Nosedives 30% on Feb 1: What Triggered the Crash?

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Adani Enterprises Nosedives 30% on Feb 1: What Triggered the Crash?

By Malvika Gurung

Investing.com -- Shares of the flagship company of Adani Group, Adani Enterprises (NS: ADEL ) crashed 30% in Wednesday’s intraday trade and closed 26.7% lower at Rs 2,179.75 apiece in the session despite a successful closing of Rs 20,000 crore follow-on public offer (FPO) on Tuesday.

The mega-cap stock nosedived on Wednesday, following a report that the Switzerland-based global investment bank Credit Suisse (SIX: CSGN ) Group AG stopped accepting the bonds of the ports-to-power conglomerate’s companies as collateral for margin loans to its private banking clients.

The Zurich-based investment banking major has assigned a zero lending value for the notes sold by the Adani Group companies - Adani Ports and Special Economic Zone (NS: APSE ), Adani Green Energy (NS: ADNA ) and Adani Electricity, stated sources as cited in a Bloomberg report.

A private bank cutting the lending value to zero leads clients to top up with cash or another form of collateral, and failing to do so can cause their securities to liquidate.

Credit Suisse’s development indicates that scrutiny of Adani Group’s finances is on the rise after the US investment research firm Hindenburg’s allegations on the conglomerate.

However, other banks are continuing to lend against Adani's debt, including the Bank of Singapore, added the report.

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  • Rakesh Raushan @Rakesh Raushan
    All fundamental ratios are abnormal....why anyone putting money in Adani only God knows.
    Like 5
    • Surya Prakash @Surya Prakash
      @Rakesh Raushan In the times like now, we have to be optimistic that a conglomerate like that is not foolish to have taken such measures to grow. Just my view.
      Like 0
    • Amarendra Kumar @Amarendra Kumar
      even tesla moved to 385 and came down to 100............of course adani stocks were over priced, and anyone having entry at top levels like suicide, all the banks and financial agency have positon at lower level below 1000, and that is justified.........
      Like 3
    • Umesh Wagh @Umesh Wagh
      he is having good political contacts
      Like 0

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