NEW DELHI: After 6 days of market rout, few of the Adani Group stocks rebounded on Friday after French energy company TotalEnergies’ positive sentiment on the firm.
However, the rebound wasn’t sufficient enough to compensate the massive losses it has suffered. Adani Group’s losses have now surmounted to nearly $120 billion.
Finance minister Nirmala Sitharaman’s statement on India’s strong banking system also exuded confidence among investors regarding their exposure to the Group. Later, RBI also reiterated Sitharaman’s statement and said India’s banking sector is resilient and stable.
Here are the top development in Adani-Hindenburg row:
Govt reviews Adani’s financials
However, the rebound wasn’t sufficient enough to compensate the massive losses it has suffered. Adani Group’s losses have now surmounted to nearly $120 billion.
Finance minister Nirmala Sitharaman’s statement on India’s strong banking system also exuded confidence among investors regarding their exposure to the Group. Later, RBI also reiterated Sitharaman’s statement and said India’s banking sector is resilient and stable.
Here are the top development in Adani-Hindenburg row:
Govt reviews Adani’s financials
- The ministry of corporate affairs has started a preliminary review of Adani Group’s financial statements and other regulatory submissions made over the years, Reuters reported quoting sources.
- The ministry’s review marks the latest scrutiny of the Adani Group, but a first by the government.
- The process was initiated on Thursday, one of the government sources told Reuters, saying it was under “Section 206” of India’s Companies Act under which the government reviews financial documents submitted over the years, such as balance sheets, books of accounts or ledgers.
Nirmala Sitharaman on Adani-Hidenburg row
- Finance minister Nirmala Sitharaman said she did not expect the ongoing controversy around Adani Group to affect investor confidence as India’s banking system is sound and the financial markets are “well regulated”.
- Sitharaman said that the State Bank of India (SBI) and Life Insurance Corporation (LIC) of India have already explained that they are not overexposed to Adani Group stocks.
- She also highlighted that India remains “an absolutely well governed” country and a “very well regulated financial market.” “One instance, however much talked about globally, I would think is not going to be indicative of how well Indian financial markets have been governed,” Sitharaman said.
Gautam Adani’s ranking falls further
- Industrialist Gautam Adani slipped to 22nd position in Forbes Real-time Billionaires list during the day. However, at market close, his ranking improved a bit to 17th spot.
- Adani has already lost his tag as the richest Indian person.
- At present, Adani’s net worth stands at $61.7 billion.
Banking sector resilient, says RBI
- Amid concerns over banks’ exposure to the crisis-ridden Adani Group, the Reserve Bank said India’s banking sector is resilient and stable, and the central bank maintains constant vigil on the lenders.
- Responding to media reports expressing concern about the exposure of Indian banks to a “business conglomerate”, the Reserve Bank said in a statement that it is constantly monitoring the banking sector.
Finance secretary says no cause for concern
- Finance secretary TV Somanathan said there was no cause for concern for depositors, policy holders or investors in any nationalised bank or insurance company due to their exposures in Adani group companies.
- The exposure of the State Bank of India and the Life Insurance Corporation in any company is far below the level where it should be a concern for investors, Somanathan told a TV channel Friday.
SBI says 0.88% exposure to Adani Group
- India’s largest lender State Bank of India (SBI) said total exposure to the Adani Group is 0.88% of the book or about Rs 27,000 crore.
- SBI said it does not envisage any setback on its bets.
- SBI has not extended any loans against shares to the ports-to-mining group, its chief said.
- SBI Chairman Dinesh Khara clarified that the non-fund exposure is limited to letters of credit and performance bank guarantees, and is not related to any equity raising or acquisition activities of the Gautam Adani-led group.
Adani Enterprises dropped from Dow Jones
- S&P Dow Jones said it will remove Adani Group’s flagship firm Adani Enterprises from sustainability indices with effect from February 7 following a media and stakeholder analysis triggered by allegations of accounting fraud.
- The move comes amid leading stock exchanges BSE and NSE putting three Adani Group companies — Adani Enterprises, Adani Ports and Special Economic Zone and Ambuja Cements — under their short-term additional surveillance measure (ASM) framework.
Four Adani Group stocks rebound
- Shares of four Adani Group firms, including Adani Enterprises and Adani Ports bounced back on Friday after facing heavy drubbing in the past 6 days.
- The stock of Adani Enterprises rebounded 1.25% to settle at Rs 1,584.20 apiece on the BSE. During the day, it tumbled 35% to Rs 1,017.10 — its one-year low.
- Shares of Adani Ports also bounced back and climbed 7.98% to Rs 498.85 after falling 14.51% to Rs 394.95 — its one-year low — during the day.
- Some Adani Group stocks revived post the confident statement by TotalEnergies, a French energy company, raising the sentiment of the market
What Moody’s, Fitch said on Adani stock plunge
- Credit ratings agency Moody’s warned that the recent sell-off in Adani group’s shares could reduce the conglomerate’s ability to raise capital.
- While its peer Fitch saw no immediate impact on its ratings.
- “These adverse developments are likely to reduce the group’s ability to raise capital to fund committed capex or refinance maturing debt over the next 1-2 years,” Moody’s said.
- Fitch added there were no significant offshore bonds maturing in the near term, reducing refinancing risks and near-term liquidity risks.
S&P revises outlook to negative
- Ratings agency S&P Global revised outlook on Adani Ports and Adani Electricity to negative from stable while affirming the rating.
- “There is a risk that investor concerns about the group’s governance and disclosures are larger than we have currently factored into our ratings, or that new investigations and negative market sentiment may lead to increased cost of capital and reduce funding access for rated entities,” S&P said in a statement.
(With inputs from agencies)
