Adani fiasco: Here's how much loss French energy major Total incurred

The much-publicised report brought out by the New York-based short seller Hindenburg Research, however, had little effect on TotalEnergies' stock prices on global bourses.

In 2019, the global giant acquired a 37.4 per cent stake in the listed entity Adani Total Gas Limited, a city gas distribution business.

France-based TotalEnergies has been hit by a double whammy of missing out on an investment profit of Rs 30,000 crore and losing Rs 1.55 lakh crore in market wealth in two Adani group companies -- Adani Total Gas Ltd (ATGL) and Adani Green Energy Ltd ( AGEL).

In September last year, the CEO of TotalEnergies, Patrick Pouyanne had told analysts that the "appreciation in value of AGEL is a source of potential cash." Though he also had added that the company has no immediate plans to cut its holding, he did hint that any reduction, if any, would be small and would only be to recoup some of its initial investment. In the September to December quarter of 2022-23, the global giant was comfortably sitting on an investment profit of over Rs 30,000 crore.

This minority investment was made in January 2021. Total entered the Adani Group company by acquiring the complete ownership of Acme Trade and Investment Limited, which had 3.6 per cent in AGEL via Total Renewables SAS France. Similarly, Total Renewables also acquired full ownership of Universal Trade & Investments Ltd which had a 16.4 per cent stake in the AGEL.

Based on the market price at the time, the acquisition cost was estimated to be around Rs 31,000 crore.

"This notional loss could be recouped if the price goes back to an earlier level. But that also is a remote possibility now," said a market player on the condition of anonymity.

The global giant, which has a 37.4 per cent stake in ATGL as a co-promoter, is also staring at a massive market cap loss. Total's market valuation in ATGL has taken a hit of Rs 1.15 lakh crore since the crash in the Adani Group companies.

ATGL offers piped natural gas to industrial, commercial, and residential customers, as well as compressed natural gas to the transportation industry. In 2021-22, it earned Rs 3,247 crore and made Rs 509 crore in profits.

For the French multinational Total, AGEL and ATGL have lost a combined market value of Rs 1.55 lakh crore.

The much-publicised report brought out by the New York-based short seller Hindenburg Research, however, had little effect on TotalEnergies' stock prices on global bourses. Its share price is steady at 59.98 euros in the last one month, with a market cap of 148 billion euros.

In fact, TotalEnergies’ partnerships with Adani Group started way back in 2018 when the duo signed up for development of a joint LNG business, Adani Total Private Limited, which is developing the Dhamra LNG regasification terminal to market LNG. The LNG terminal is slated to start operations in the second quarter of 2023.

In 2019, the global giant acquired a 37.4 per cent stake in the listed entity Adani Total Gas Limited, a city gas distribution business.

In 2020, TotalEnergies and Adani Group extended their partnership, with the French major taking 20 per cent minority interest in the listed company, Adani Green Energy Limited, and a 50 per cent stake in a 2.35-gigawatt portfolio of operating solar assets owned by AGEL.

In June last year, TotalEnergies entered into an agreement with Adani Enterprises Limited (AEL) to acquire a 25 per cent interest in Adani New Industries Limited (ANIL), which is for the production and commercialization of green hydrogen in India. The equity component from Total is yet to come.