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PremiumFor last 12 days Gautam Adani led Adani Group has been bearing the brunt of the US short seller Hindenburg Report's ‘expose’ on the group. Adani had to withdraw the Follow on Public Offer (FPO) to boost confidence but nothing that the company has done so far has brought any good news. Bad news is piling up during the earning season taking the company stocks to rock bottom.
Stock analyst Aswath Damodaran has put a stock value of ₹947 on it. Adani Transmission is expected to come out with results today, whereas, Adani Ports and Adani Green will declare results tomorrow. Adani Power is expected to come out with results on 8th February.
Opposition is also using Hindenburg Report against Gautam Adani as a fodder against the government. Parliament was adjourned last week due to disruptions on the topic and expected to continue.
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Adani Enterprises stock opened with a loss of 7% at 1473. Ahead of results of its results Adani Transmission is down 10%
Bharatiya Janata Party (BJP) leader Sunita Duggal on Saturday said that opposition's demand for a Joint Parliamentary Committee (JPC) for investigating the allegations against Adani group chairman Gautam Adani is not needed and an investigation would be conducted if found anything suspecious.
In a press conference held to discuss the Union Budget 2023, the BJP leader said, "There is no need of a JPC here. Just like every citizen, Gautam Adani is also a citizen of the country. All the authorities will check everything and if anything is suspicious, a proper investigation will be done."
Bankers have said that there is no internal decision to curtail Adani group’s sanctioned loans. Adani Group’s domestic lenders do not plan to cut off the conglomerate from utilizing sanctioned but unused credit lines for fear their action could backfire and lead to defaults, four bankers said. It is estimated that out of the $9 billion exposure that Indian banks have to the group, about $1.5 billion is yet to be used.
They said that nor term loans or working capital will be curtailed. While term loans fund capital expenditure, working capital is utilized for operational expenses. Read more here
India’s weighting in MSCI’s emerging-market benchmark has dropped after the brutal selloff in Adani Group’s stocks, giving away its second spot to Taiwan after a rally in the latter’s market.
As of the end of January, Taiwan’s weighting in the MSCI Emerging Markets Index rose to 14.2%, behind leader China’s 31.2%, while India’s fell to the third spot with 13%, according to Bloomberg-compiled data. India captured the second spot from Taiwan in August.
The role reversal between India and Taiwan highlights the contagion of a stock meltdown that has wiped out $112 billion of market value in Gautam Adani’s indebted conglomerate since US-based Hindenburg Research made fraud allegations against the billionaire’s business empire. While the MSCI India Index has lost 4.2% this year, its Taiwan counterpart has surged about 11% as part of a broader North Asian rally induced by China’s reopening optimism. (Bloomberg)
CPI MP Binoy Viswam gives suspension of Business Notice in Rajya Sabha under rule 267, demanding a discussion on Adani group of companies crisis, ANI has reported. He said, "huge public money belonging to the common people of India at serious risk of being wiped out in the unfolding crisis."
Only one stock, which is part of the Adani Group, has been put under the ban for trade on Monday, February 6, 2023 under the futures and options (F&O) segment by the National Stock Exchange (NSE). The stock has been put on ban under the F&O segment as it has crossed 95% of the market-wide position limit (MWPL), as per the NSE.
Adani Ports continues to be a part of the F&O ban list whereas Ambuja Cements, which was in the list in the past few sessions, has been removed from the list by the stock exchange today. The NSE updates the list of securities in F&O ban for trade everyday. Read more here
Standard Chartered Plc. has stopped accepting bonds of Adani Group firms as collateral on margin loans, ET Now television channel reported, without saying where it got the information.
The lender has asked its private clients to top up their collateral for any shortfall, the report said.
A Standard Chartered India spokesperson declined to comment on the report. Read more
Bharatiya Janata Party (BJP) leader Sunita Duggal on Saturday said that opposition's demand for a Joint Parliamentary Committee (JPC) for investigating the allegations against Adani group chairman Gautam Adani is not needed and an investigation would be conducted if found anything suspecious.
Amid the ongoing Hindenburg-Adani row, the Congress will launch protests from the Parliament to the streets today. The party has decided to hold countrywide protests in front of Life Insurance Corporation (LIC) offices and State Bank of India (SBI) branches. In Delhi, the demonstration will be held by NSUI-Youth Congress outside the SBI office and LIC office located at Parliament police station. Congress leaders across the country will protest outside the SBI office and LIC office, in which big leaders of the states will participate. Congress MPs will protest near the Gandhi statue in Parliament House on Monday.
Although the Congress is getting the support of other Opposition parties on the Adani issue, it has to be seen whether the parties such as the Bharat Rashtra Samithi, Aam Aadmi Party and Trinamool Congress, which are seen together in the meetings, will join the Congress demonstration or extend moral support.
However, the Bahujan Samaj Party (BSP) and Janata Dal (Secular) have kept their distance from the Congress on this issue. (ANI)
Friday’s recovery in front line Adani group stocks such as Adani Ports, Adani Enterprises and Ambuja Cements could continue on Monday, with regulators, banks, and the finance minister all trying to calm investor nerves even as more surveillance measures are put in place to curb excessive speculation.
But experts said the duration and extent of the recovery are still up in the air amid a slew of Adani group earnings reports this week and as investors absorb the fallout of the cancelled ₹20,000 crore follow-on public offer (FPO) of group flagship Adani Enterprises, which could impact the conglomerate’s future fundraising prospects. Read more here
The crisis facing billionaire Gautam Adani has revealed a potential pitfall in India’s ambitious plan to reduce emissions: its reliance on the country’s most affluent and powerful private citizens.
Led by Adani’s $70 billion pledged investment in green energy infrastructure, India’s tycoons have so far committed to spend far more than the government on the energy transition. Read more here
New York University's finance professor Aswath Damodaran has valued Adani Enterprises at ₹947 per share.
“I am willing to believe that the Adani Group has played fast and loose with exchange listing rules, that it has used intra-party transactions to make itself look more credit-worthy than it truly is and that even if it has not manipulated its stock price directly, it has used the surge in its market capitalization to its advantage, especially when raising fresh capital," he concluded in a blog post today.
"I an of the view that a complete debate and thorough probe must take place," he said. Nath also claimed people were unhappy with the BJP government in Madhya Pradesh and that it would be shown the door in the Assembly polls.
Telangana Chief Minister K Chandrasekhar Rao on Sunday targeted the Centre over the import of coal and its "love" for Adani.
"It is my request to the Prime Minister that Adani Group is involved in such a big scam and it should be discussed in a joint parliamentary committee. Almost ₹10 lakh crore has been evaporated," he alleged.
"Everyone knows he (Adani) is your friend. In just two years, he became the world's second richest person. If you are honest, set up a joint parliamentary committee. It is my demand," Rao said.
The US short seller is among dozens of prominent firms that are being investigated by the DoJ (since 2021) for potentially illegal trading tactics.
Read more: Is Hindenburg Research under investigation in US? Here's all you need to know
The Congress will launch protests from the Parliament to the streets on Monday. The party has decided to hold countrywide protests in front of Life Insurance Corporation (LIC) offices and State Bank of India (SBI) branches.
"I feel the share (value) of a private company would hardly have anything (impact) to do with the economy of the country. I think it is a normal process. The company's shares had witnessed ups and downs in the past," the Union Jal Shakti minister told reporters.
According to reports, Bangladesh Power Development Board has sent a letter to the Adani Group seeking a a revision to the power purchase agreement it signed with Adani Power for importing electricity from a thermal power plant in Jharkhand.
"BJP scared. Trying to RUN AWAY FROM DEBATE in #Parliament. Great chance to skewer Modi Govt from Mon Feb 6 when both Houses debate President's Address. Keep a close watch. If any Oppn party disrupts, they are in CAHOOTS WITH BJP We All India Trinamool Congress want debate, not disruption," O'Brien tweeted.
Read more: No systemic risk to Indian financial system: Uday Kotak amid Adani Group's stock rout
The Congress on Sunday stepped up its attack on the Centre over allegations against the Adani group, alleging that the Modi government's "loud silence" over the issue "smacks of collusion".
"I had said that in terms of our macroeconomic numbers, the issue (Adani enterprises issue) is like a storm in a tea cup and I still stand by that statement," Union Finance Secretary T V Somanathan said in response to a query during a press conference in Mumbai.
Finance Minister Nirmala Sitharaman opined that the Adani stock rout was a company specific issue, and noted that banks and insurance companies are "not overexposed" to any one company.
"Yes, there have been occasional blips in the market, maybe small or big, but they do address issues like that. And I strongly believe that our regulators are seized of this matter," she said in an interview with Times Now.
The Adani episode will have a long term impact on the country's economy and it is "unfortunate" that the government is not taking the people of the country into confidence on the issue, BSP supremo Mayawati said.
The former Uttar Pradesh chief minister also asserted that India's image is at stake due to the issue.
"How can the Adani episode be forgotten on Ravidas Jayanti as it is a new cause of concern? Instead of finding a solution to such matters, the government is making new promises and ignoring the people. The image of India is at stake due to the Adani issue and everyone is concerned but the government is taking this issue very lightly. This is something to think about," Mayawati said.
According to a report by WSJ, one of the large shareholders of Adani Power is an offshore company called Opal Investment Pvt Ltd.
Adani Power had described Opal as an independent shareholder that has no ties to the conglomerate beyond a 4.69% stake in the company in its quarterly report.
WSJ mentioned that Opal was incorporated in Mauritius by Trustlink International Ltd, a financial service company with ties to the Adani family.
According to the Mauritius filings, one of Trustlink's directors Louis Ricardo Caillou sits on the board of Opal.
The filings also list Caillou as a board member of another Mauritius-based company, Krunal Trade & Investment where Adani's older brother Vinod Adani and Sunir Mittra, the CEO of Adani's family office are also listed as a board members.
Adani Group said in a 413-page rebuttal of Hindenburg's report that it has no control over what stocks Opal and other independent shareholders buy or the source of their funds.
Billionaire Gautam Adani stood beside Israeli Prime Minister Benjamin Netanyahu on 4 February and looked relaxed as hundreds of people gathered for the ceremonial signing at the Haifa Port. The Haifa Port is being co-developed by Adani.
Ever since the Adani Group stocks dropped, Adani has been looking tensed. However, despite a searing short seller attack that triggered a stock rout, the last-minute bids had helped the flagship of his ports-to-power empire close a record $2.5 billion share sale. Read more here
Bank of Baroda MD and CEO Sanjiv Chadha has said that his bank will continue to lend Adani group, Moneycontrol has reported.
Axis Bank on Saturday clarified that the lender remains comfortable with its exposure to the Adani Group. In a statement shared with exchanges, the lender wrote, "We extend credit, basis comfort on cash flow, security, and repayment capability of obligors as per the Bank's credit assessment framework. We remain comfortable with our exposure to Adani Group basis the same."
The lender also said its exposure to Adani Group is primarily to the operating companies in the ports, transmission, power, gas distribution, roads, airports, etc. It also added that the non-fund based facilities are primarily in the form of letters of credits and performance bank guarantees that are majorly short tenor.
In addition, the lender said the bank's fund based and non-fund based outstanding towards the Group's joint ventures is at 0.02 per cent and 0.25 per cent, respectively of the Bank's net advances.
Further, the lender said, "We (the bank) would like to highlight that the Bank has a resilient balance sheet with standard asset coverage of 1.53 per cent as of December 31, 2022." (ANI)
In a LinkedIn post, Adani CFO Jugeshinder Singh writes a Corrigendum.
"Corrigendum: Story slant false. Never said investor. I said media who never critically examined, and still have not done to date, a single "question" posed by short sellers report.
This comes after a Reuters report stated that, “Adani's finance chief, Jugeshinder Singh, likened the behaviour of Indian investors participating in the sell-off to the colonial-era Jallianwala Bagh massacre in Amritsar city."
Three investment funds that purchased Adani Enterprises' FPO have ties to the Adani Group and suspected Adani proxies, according to a report by Forbes.
According to a report by Moneycontrol, the prestigious Science museum in London will continue its association with the Adani Group.
In 2021, Gautam Adani signed a sponsorship deal with the museum for a new cutting-edge gallery which is set to open later this year.
Several activists and academicians have criticised the deal and questioned the appropriateness of the Science Museum accepting money from Adani which earns significant revenues from coal plants, Moneycontrol reported.
Axis Bank clarified that the lender remains comfortable with its exposure to the Adani Group.
In a statement shared with exchanges, the private lender wrote, "We extend credit, basis comfort on cash flow, security, and repayment capability of obligors as per the Bank's credit assessment framework. We remain comfortable with our exposure to Adani Group basis the same."
The lender also said its exposure to Adani Group is primarily to the operating companies in the ports, transmission, power, gas distribution, roads, airports, etc. It also added that the non-fund based facilities are primarily in the form of letters of credits and performance bank guarantees that are majorly short tenor.
“A security personnel of the Lok Sabha told Rahul Gandhi that shares of Adani group were doing well. He (Gandhi) told him that it was just a bubble which would burst soon," Singh said. This was precisely what happened a month later, the Rajya Sabha leader added. Incomes of most people fell during the coronavirus pandemic but the market capitalizations of capitalists soared, Singh said.
"It is hard to understand that when the market remained closed how the market capitalisation of businessmen skyrocketed," he added.
The BJP on Saturday said financial markets are highly regulated and the Centre is closely monitoring the situation. "I do not want to name any particular group but Finance Minister Nirmala Sitharaman has already spoken on this subject. The Reserve Bank has also given a detailed explanation as per which banks of the country have given huge loans to various companies by following all parameters," Bharatiya Janata Party's national spokesperson Gopal Krishna Agarwal told reporters.
Bondholders of Adani Group firms are holding initial conversations with financial advisers and lawyers to weigh their options. Investors are seeking guidance about how the sprawling group’s debt structure would be impacted under various scenarios, including the prospect for regulatory and legal redress.
“There are talks all over India and people are worried regarding the Adani issue. At this time government must be taking proper steps on it. But instead, Finance Minister herself is advocating for Adani group," Congress MP Adhir Ranjan Chowdhury said.
Adani Group responded to the Hindenburg Research saying that the report was baseless and termed the allegations "unsubstantiated speculations". However, Hindenburg emphasized that it stood by its report.
Hindenburg said in its reply that, instead of addressing any of the substantive points, Adani “stoked a nationalist narrative' that seeks to conflate the 'meteoric rise and the wealth of its chairman, Gautam Adani, with the success of India itself".
To address concerns surrounding the banking system’s exposure to the Adani group, the Reserve Bank of India clarified on Friday that the sector remains resilient and stable.
In a press release, RBI said that it is issuing this clarification as there have been media reports expressing concern about the exposures of Indian banks to a business conglomerate.
The regulator has a Central Repository of Information on Large Credits (CRILC) database system where the banks report their exposure of ₹5 crore and above which is used for monitoring purposes, it said.
The withdrawal of the follow-on public offering (FPO) by the Adani Group will impact its airport upgradation plans, since over one-fourth of the proceeds was intended for developing its airports.
State Bank of India (SBI) chairman Dinesh Khara had said the bank's total exposure amounting to ₹27,000 crore in Adani Group is 0.88 per cent of its loan book.
"We have lent to Adani (group) for projects having tangible assets and adequate cash. They have met obligations...our total exposure to Adani group is 0.88 per cent as of December 31," he said at a press conference.
The country’s top three state-run banks have an aggregate exposure of close to ₹40,000 crore to various entities of the Adani group, disclosures by banks showed, even as lenders and the Reserve Bank of India allayed fears of any stress on banks’ books because of the Adani stock rout.
India would take a balanced approach, with bold but prudent steps, to drive economic growth and expects its China-plus-one strategy to work, finance secretary T.V. Somanathan said in an interview.
Regarding the US-based Hindenburg Research’s accusations of share price manipulation and accounting fraud by Adani Group companies, Somanathan said public financial institutions’ exposure to any single firm is minimal and poses no risk to depositors or policyholders.
India's market regulator moved to calm investor concerns on Saturday, saying that its financial markets remain stable and continue to function in a transparent and efficient manner, despite recent dramatic stock falls in Adani Group companies.
Shares in Adani Group firms, controlled by billionaire tycoon Gautam Adani, have dropped by $100 billion, or half their market value, since U.S-based short-seller Hindenburg Research made allegations of stock manipulation and unsustainable debt. (Reuters)
US-based short seller Hindenburg Research accused the Adani group of "brazen" market manipulation and fraud, which caused a significant stock selloff. Gautam Adani has consistently refuted the accusations, and his company has referred to the information as "bogus". A lot has happened ever since.
The Opposition has not been given even a minute to raise the Adani issue in Parliament, the Congress said on Saturday, hitting back at Union Minister Anurag Thakur who said the government has nothing to hide on the matter.
The Opposition has alleged that the recent meltdown in Adani Group shares is a scam that involves common people's money as public sector LIC and SBI have invested in them.
The Opposition has demanded a joint parliamentary committee probe or a Supreme Court-monitored investigation into the Adani issue after allegations of financial irregularities and share price manipulation were levelled by the US-based short-seller Hindenburg Research. (PTI)
Bondholders of Adani Group firms are holding initial conversations with financial advisers and lawyers to weigh their options after the unfolding crisis at the Indian conglomerate sent several dollar obligations into the distressed territory.
Investors are seeking guidance about how the sprawling group’s debt structure would be impacted under various scenarios, including the prospect for regulatory and legal redress, after short-seller Hindenburg Research leveled accusations of corporate malfeasance against the Adani Group, according to people familiar with the matter. (Bloomberg)
Adani Group has lost more than USD 100 billion in market value since Hindenburg Research accused it of stock manipulation and accounting fraud in the January 24 report. The group has denied any wrongdoing and has threatened to sue Hindenburg.
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