As the Adani-Hindenburg row continues, French energy giant TotalEnergies SE has reportedly seen its assets decline by ₹1.55 lakh crore. The company - which owns about a fifth of Adani Green - has also missed out on investment gains to the tune of ₹30,000 crore. Following the release of the explosive Hindenburg report, the oil major had also put a multi-billion dollar plan to produce green hydrogen with Adani on hold.
The company holds a 50% stake in Adani Total Private Limited - a joint venture that provides for oil and gas exploration. It also owns half of AGEL23 - a joint venture with Adani Green Energy Limited (AGEL) for the operation of three gigawatts of solar projects.
US short-seller Hindenburg Research had accused the Gautam Adani-led group of stock manipulation and accounting fraud, prompting a massive stock market rout. Listed companies of the group have lost over $125 billion in market value since the report came out three weeks ago.
While TotalEnergies insists that no re-evaluation has been performed following the stock market rout, the situation is estimated to have caused a massive loss to the company. It is however pertinent to note that the Hindenburg report has had little effect on Total's stock prices on global bourses.
According to reports, TotalEnergies CEO Patrick Pouyanne had told analysts in September last year that any appreciation in the value of AGEL would be a ‘source of potential cash’. The company had indicated no immediate plans to cut its holdings, with Pouyanne hinting that any minor reduction would only be to recoup part of the initial investment. And as the Adani Group continued to perform well, the French giant found itself sitting on an investment profit of over ₹30,000 crore in the last three months of 2022.
While the company insisted in an official statement earlier this month that its $3.1-billion exposure to Adani was "limited", it is is now staring at a massive market cap loss. Reportedly, Total's market valuation in ATGL has taken a hit of ₹1.15 crore. AGEL and ATGL have lost a combined market value of ₹1.55 lakh crore for the French multinational.
While this notional loss could be recovered if the prices revert to earlier levels, this appears to be somewhat unlikely at the moment.
Last week, the French oil major also said that it would wait for the result of an independent audit before proceeding to invest in Adani Group's $50 billion plans to make green hydrogen. The company had previously announced plans to acquire a 25% stake in Adani New Industries Limited for the production and commercialisation of green hydrogen in India.
“The entities TotalEnergies has invested in with Adani are managed in accordance with applicable regulations," TotalEnergies asserted in a press release earlier this month.
(With inputs from agencies)