As the stock market continues to tank, Adani is no longer Asia’s richest person.

In response to a US short-seller report, shares of Indian tycoon Gautam Adani’s conglomerate fell once more on Wednesday, and the billionaire lost his position as Asia’s richest person. The decline in his company’s stock value reached $86 billion.

The chairman of Reliance Industries Ltd., Mukesh Ambani, ranked ninth on Forbes’ rich list with an estimated net worth of $83.7 billion. As a result of Wednesday’s stock losses, Adani dropped to position 15 with an estimated net worth of $75.1 billion, below his rival.

Before the critical report by US short-seller Hindenburg, Adani had ranked third.

The losses mark a dramatic setback for Adani, the school dropout turned billionaire whose fortunes rose rapidly in recent years in line with the stock values of his businesses that include ports, airports, mining, cement, and power. Now, the tycoon is fighting to stabilize his companies and defend his reputation.

The share slides came just a day after the Adani Group managed to muster support from investors for a $2.5bn share sale for flagship firm Adani Enterprises, in what some saw as a stamp of investor confidence at a time of crisis.

Allegations on the group

According to the research released by Hindenburg Research last week, the group engaged in stock manipulation and unlawful exploitation of offshore tax havens. High debt and the values of seven listed Adani companies were other issues that were brought up.

The group has refuted the claims, claiming that the stock manipulation story put up by the short sellers has “no validity” and is the result of their lack of understanding of Indian legislation. It said that it has always provided relevant regulatory disclosures.

Effect of report

Adani Enterprises’ stock fell 28% on Wednesday, doubling its losses since the Hindenburg report to more than $18 billion. Adani Enterprises is frequently referred to as the incubator of Adani businesses. A 19 percent decline was seen in Adani Ports and Special Economic Zone. The worst day ever for both stocks was recorded.

Avinash Gorakshakar, head of research at Mumbai-based Profitmart Securities, described the decline in Adani equities as “dangerous.”

Adani Power, Adani Wilmar, and Adani Total Gas all had declines of 5%, 10%, and 11%, respectively, exceeding their daily price caps. Adani Transmission and Adani Green Energy both experienced declines of 3 and 5.6%, respectively.

The joint venture between India’s Adani and France’s Total, called Adani Total Gas, lost nearly $27 billion as a result of the short-seller report.

On Wednesday, the price of dollar bonds issued by Adani businesses started to decline again. Adani Ports’ US dollar-denominated notes that are due in February 2031 suffered the most losses, dropping 3.59 cents to 67.58 cents.

Bloomberg reported that Credit Suisse had stopped accepting bonds of Adani group companies as collateral for margin loans to its private banking clients, underscoring the unease in some quarters.

 Lack of trust

According to Ambareesh Baliga, a Mumbai-based independent market analyst, “there was a tiny rally yesterday after the share sale went through, after seeming implausible at one point. However, the negative market mood has become obvious again after the bombshell Hindenburg report.”

“With the equities declining despite Adani’s refutation, it is obvious that investor confidence has been harmed. It will take some time for things to stabilize, said Baliga.

Economic Affairs Secretary Ajay Seth was questioned about if he was worried about further losses on India’s equity markets as a result of the decline in Adani Group shares and responded that the government “does not comment on problems linked to a particular firm.”

Since the release of the Hindenburg report, India’s leading Nifty index has decreased by 2.7%. Data also reveals that after the release of the Hindenburg report, foreign investors sold Indian equities at a net $1.5 billion, the largest four-day outflow since September 30.

An Australian regulator announced on Wednesday that it would review the allegations made by Hindenburg to determine whether further investigations were necessary. This comes as scrutiny of the conglomerate is intensifying.

According to sources speaking to Reuters, India’s markets regulator, which has been looking into acquisitions by the group, will add Hindenburg’s analysis to its preliminary probe. The Adani-Hindenburg controversy has not been addressed by the regulator.

ICRA Ltd., an affiliate of Moody’s Investors Service, said on Wednesday that it was keeping an eye on the effects of the events on the Adani Group’s rated portfolio. Although the group’s sizable debt-funded capital investment plan was a “key challenge,” it was also noted that some of it was discretionary and may be delayed depending on the financial situation.

The government-run Life Insurance Corporation (LIC) announced on Monday that it would ask Adani’s management for explanations about the short-seller report. As of the end of December, LIC owned 4.23 percent of Adani Enterprises and more than 9 percent of Adani Ports and Special Economic Zone. A significant investor in Adani’s most recent share sale was the insurance behemoth.

Cement companies ACC and Ambuja Cements saw their shares fall by 6.2 percent and 16.7 percent, respectively, after Adani Group acquired them from Holcim of Switzerland for $10.5 billion last year.

In its report, Hindenburg claimed to have shorted the Adani Group’s US bonds and derivatives that were traded outside of India.