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Business News/ Companies / News/  Adani firms' loans and securities rating comes under Sebi radar: Report
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Adani firms' loans and securities rating comes under Sebi radar: Report

As Adani firms embattle allegations of the Hindenburg report in court, last week, it looks like the rating companies were asked by Sebi to share the information including all outstanding ratings, outlook, and possible updates from any discussions with Adani Group officials.

The market valuation of Adani group companies together is now down 70% from its peak, from around Rs.25 lakh crore to 7.55 lakh crore.Premium
The market valuation of Adani group companies together is now down 70% from its peak, from around Rs.25 lakh crore to 7.55 lakh crore.

After the Hindenburg's controversial report, billionaire Gautam Adani-backed group's companies' debt and securities ratings have come under Sebi's radar. As per a report on Wednesday, the market regulator has likely sought details of all the ratings from credit rating agencies on local loans and securities of Adani companies. By end of February 22nd, Adani firms' market valuation dropped by 70% from its peak level.

As Adani firms embattle allegations of the Hindenburg report in court, last week, it looks like the rating companies were asked by Sebi to share the information including all outstanding ratings, outlook, and possible updates from any discussions with Adani Group officials.

A person aware of the communication from the regulator told Economic Times, "Sebi is probably trying to ascertain whether the sharp fall in stock prices of several Adani companies would have any bearing on the liquidity positions and the debt repayment capability of the borrowing companies... Most of this information, however, is in public domain."

On Wednesday, investors saw the destruction of 40,000 crore of wealth in Adani stocks. All of the Adani stocks were in the red.

The market valuation of Adani group companies together is now down 70% from its peak, from around Rs.25 lakh crore to 7.55 lakh crore.

Post the release of US-based short seller Hindenburg's bombshell report on 24 January, the shares of Adani Group shares have lost 60% of their value.

Adani Enterprises on Wednesday dipped by over 10.4% to end at 1,404.85 apiece. Adani Ports dipped by 6.25% to end at 546.85 apiece. The rest of Adani named stocks had hit the day's lowest limit and froze around those levels.

Adani Wilmar stock froze at a 5% lower circuit at 390.35 apiece, while Adani Total Gas also touched a 5% lower circuit to close at 834.95 apiece. Similarly, at 5% lower circuit each, Adani Green Energy, Adani Transmission, and Adani Power ended at 539.30 apiece, 788.75 apiece, and 162.60 apiece respectively.

Adani's newly added media arm, NDTV share price ended at 201.90 apiece down 4.18% on BSE. While cement business too faced massive disruption, with Ambuja Cements stock closing at 335.55 apiece lower by 4.92%, and ACC stock at 1,752.35 apiece below 4.13%.

The sharp selloff in Adani stocks dragged broader markets as well. Sensex shed 927.74 points or 1.53% to end at 59,744.98. While Nifty 50 dipped by 272.40 points or 1.53% to close at 17,554.30.

Also, the MSCI India Index slid as much as nearly 2% in the day, taking its losses from a December 1, 2022 peak to more than 10%. Adani stocks were the biggest laggards.

Last week, while rejigging indexes, NSE added two Adani stocks namely Adani Wilmar and Adani Power to its Nifty Next 50 Index and Nifty Next 500 Index, respectively from March 31, 2023. While reports have stated that three Adani Group companies – Adani Power, Adani Total Gas, and Adani Transmission – are expected to be removed from the MSCI India index during the rebalancing exercise in May following a sharp correction in their stock prices.

Also, FTSE Russel confirmed that it intends to proceed with the scheduled index review changes for Adani Group (India) and its associated securities. Earlier, FTSE added 10 Indian stocks to its Global Large-cap index as part of its semi-annual index review, but no action was taken on Adani stocks.

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Published: 22 Feb 2023, 07:07 PM IST
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