Indian politicians and regulators intervened over the weekend to calm tense nerves over fears that the turmoil surrounding billionaire Gautam Adani’s conglomerate could spill over into the local economy and affect global investor sentiment towards the country.
Officials in Prime Minister Narendra Modi’s government said Indian regulators were independent and competent to deal with the fallout, while the Securities and Exchange Board of India said it had a duty to ensure market integrity. The central bank has given assurances that the banks are keeping their exposure to the Adani group within limits.
The market value of Mr. Adani’s companies has fallen by nearly half since the release of a scathing report by US-based short seller Hindenburg Research on January 24, which accused him of stock manipulation and accounting fraud. The group has repeatedly denied Hindenburg’s allegations of corporate misconduct and threatened legal action.
The turmoil has become a national issue, with politicians disrupting parliament to demand answers as Mr Adani’s interests are often intertwined with India’s growth plans. The main opposition party increased pressure on Mr Modi over his silence and planned a nationwide protest today to highlight the risk to retail investors.
Bankers and industrialists also commented on the impact on India. Asia’s wealthiest financier Uday Kotak said that while he sees no systemic risk to India’s financial system from “recent events,” the country’s big companies rely on global sources of debt and equity financing, and local underwriting and capacity building need to be improved.
As the saga enters its third week, investors brace for further volatility and focus turns to how the Adani Group will fund its debt obligations.
The plunge in corporate shares has cost India its place among the world’s top five stock markets, while the rupee is the worst-performing Asian emerging currency this year.
New Delhi rushes to limit the blow. Finance Minister Nirmala Sitharaman said
The recent market turmoil will not affect the country’s economic fundamentals. Trade Minister Piyush Goyal echoed the sentiment, saying India’s financial markets are among the most respected and well-regulated in the world.
https://www.independent.ie/business/world/india-looks-to-restore-calm-as-gautam-adani-crisis-enters-third-week-42328830.html India seeks to restore calm as Gautam Adani crisis enters third week
