Yahoo Finance Modi ally suffers £9.7bn stock crash as Indian election landslide fails to materialise
A billionaire ally of Narendra Modi has seen the value of his industrial empire crash by one trillion rupees (£9.7bn) after initial counts indicated that the result of the Indian general election was closer than expected.
Shares in the main listed unit of Indian billionaire Gautam Adani’s company Adani Enterprises fell 25pc following the early polling, which suggested a reduced majority for Prime Minister Modi’s party.
Mr Adani, the multinational group’s billionaire chairman, is a close ally of the Indian leader and his Right-wing Bharatiya Janata party.
Mr Adani’s fortune has greatly increased since Mr Modi took office a decade ago, as his sprawling empire won state contracts to build infrastructure projects across the country. He is one of the world’s richest men with a net worth of $134bn (£110bn) at the end of 2022.
Opposition parties and other critics have accused Mr Adani of unfairly benefiting from his relationship with the Prime Minister.
Mr Adani has attributed his success to governance, financial discipline, decision-making processes and “underlying growth of the country”.
Adani Enterprises was the biggest faller on the Mumbai stock exchange on Tuesday, which suffered a broader sell-off.
The benchmark Sensex index fell more than 7pc by afternoon trading.
Exit polls had predicted a landslide victory for Mr Modi’s Bharatiya Janata Party (BJP) and its allies – known as the National Democratic Alliance (NDA) – in this year’s election.
With nearly half of the vote counted, election commission figures on Tuesday afternoon still showed Mr Modi on course to win a third term but with a reduced majority.
Avnish Jain, head of fixed income at Canara Robeco Asset Management, said: “If the government is weak, even if the NDA forms it, then they won’t have the full ability to do the reforms.
“It could lead to a broader fiscal push and some populism in the budget.”
The sharp drop in the value of Adani Enterprises is the latest setback for the group, whose activities span ports, airports, power, coal and renewable energy infrastructure.
It had been staging a recovery following an attack by a US-short seller in early 2023, which accused it of stock price manipulation and accounting fraud.
The allegations, which were strongly denied by Mr Adani, forced the company to abandon a $2.4bn share sale as international investors steered clear. The incident wiped as much as $150bn off its market value.
The business was close to clawing all of that back before the election jitters shook investor confidence.
