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How LIC Gives better Returns? Know Inside Story of India's Biggest Insurance Company | Lokmat Hindi

How LIC Gives better Returns? Know Inside Story of India's Biggest Insurance Company | Lokmat Hindi



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LIC has seen a 59 per cent rise in value of its investments in Adani group companies in 2023-24 fiscal year after the conglomerate made a smart recovery since being hammered by the Hindenburg report.

लोकमत हिंदी यूट्यूब चैनल पर स्वागत है. यहां आपको मिलेगी लेटेस्ट खबर, पॉलिटिकल उठापटक, खबरों की रिसर्च, एनालिसिस, फीडबैक, मनोरंजन की दुनिया, खेल-खिलाड़ी, सोशल मीडिया का वायरल रायता, फिल्म रिव्यू, खास मुद्दों पर मंथन और बहुत कुछ. हिंदी में बड़ी खबरों, एक्सक्लूसिव वीडियोज़ और सेलिब्रिटीज़ के साथ बातचीत से जुड़े रहने के लिए बने लोकमत हिंदी के साथ.

Welcome to Lokmat Hindi YouTube Channel. Lokmat Hindi channel is all about Latest News, politics news, entertainment news, sports news, social media news, movie reviews, opinion news and more. Lokmat Founded in 1971 by Jawaharlal Darda, it is the largest read Marathi-language newspaper in India. It is also available in an e-paper format and is published in Hindi and English as Lokmat Samachar and the Lokmat Times respectively.
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Hindenburg-Adani saga: Supreme Court’s Expert Committee finds no regulatory failure — so who caused disruption in Indian markets?

Gautam Adani

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The Expert Committee appointed by the Supreme Court to look into the allegations raised by the Hindenburg report and determine whether there was regulatory failure in dealing with the alleged contravention of the law, among other things, has submitted its report. The report has examined the entire matter in depth on various issues like an assessment of the factors that led to volatility in the markets, whether there was regulatory failure in disclosures, and price manipulation among others. It has not found any regulatory failure and this point itself deflates the entire narrative that sought to disrupt Parliament and cast aspersions on the regulations dealing with the Indian capital market.

The report states that the Indian market was not unduly volatile, though the Adani group’s stocks showed an increase in volatility after the release of the Hindenburg report. This, in a way, shows the maturity of the Indian investor who refused to get caught in the political mudslinging and maintained composure during difficult times. The committee has mentioned that the allegations made by the report were inferential and based on publicly available information. This raises a larger question of why the entire issue was given a political colour without an adequate understanding of the matter or even an inquiry being completed.

Such an effort to score political brownie points put the entire reputation of the Indian capital market at risk at a time when it was an island of stability across a troubled world. The report mentions steps taken, like the action by the Adani group to pare down debt and the infusion of new equity investment by a private investor, that has led to an increase in confidence in the stocks. This is also shown by the stocks, which are stable at newly priced levels and data also shows that retail investors have increased exposure to the companies after January 24, 2023.

The committee has looked at data which show retail investors participating in large numbers in the futures and options segment, but with nearly 90 per cent incurring a loss. It wants increased levels of financial literacy, because it is as important as national security, and wants financial literacy to be included in the school curriculum. This has become a vital point as investors increasingly need to understand how incorrect information or interpretation can cause turmoil in the capital markets impacting their hard-earned money. There is also a huge amount of funds that are lying unclaimed by deceased persons and it has proposed setting up a Central Unclaimed Property Authority which will help investors to reclaim their various amounts.

The issue of minimum public shareholding depends on whether 13 foreign entities as mentioned in the report are compliant with disclosures of their beneficial owners as per the law. The foreign portfolio investors in question have made declarations identifying their natural owners controlling their decisions. In addition, the requirement to disclose the last natural owner was done away with by SEBI in 2018, but still it has been investigating the said entities since October 2020. This dichotomy has led to SEBI drawing a blank in its investigations. Based on this the committee has decided that it is not possible to determine regulatory failure.

The definition of the terms ‘related party’ and ‘related party transactions’ is also of critical importance. SEBI has substantially amended these terms in November 2020 with the impact of the changes coming in with prospective effect at later dates in stages. Since the market regulator has undertaken this step, the feasibility of testing the principles underlying the regulations governing related party transactions has been eroded.

Concerning the issue of price manipulation in Adani stocks and their artificial inflation, SEBI has an automated system that throws up data considering various factors including the concentration of net buyers/sellers, whether some entities traded among themselves, whether profit or loss was made etc. In the case of Adani stocks, 849 alerts were generated and various reports came out both prior to and after the release of the Hindenburg report. However, no pattern or artificial trading among the same parties was found. Again, allegations were made about public institutions like Life Insurance Corporation, which had invested in these companies, without any basis. Some of the investments are automatic due to their inclusion in passive products, since some of the Adani group companies were part of the main indices. But the danger is that casting aspersions on financial decisions without proof can impact the confidence of markets and consequently the value of the investments.

Overall, the report brings out the facts clearly. There was no regulatory failure. But it also brings up a larger issue, which too needs an independent investigation.

This investigation needs to go into the events that were triggered by the Hindenburg report and find out who was instrumental in bringing this about. The impact has been huge because not only did the fall and uncertainty in the capital markets hurt investors financially but even Parliament was stalled. Legislative work was held up and this led to a waste of public money. At a time when the country is on the path of growth, and considering its stature around the world, these kinds of disruptions need to be avoided.

The writer is a member of the BJP and former Union Railway Minister



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Six entities under lens for suspicious trading in Adani shares: Supreme Court panel

Adani shares

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Six entities including four foreign portfolio investors (FPIs) are under the lens for suspicious trading in Adani Group shares prior to the release of the damning Hindenburg report, the Supreme Court-appointed expert committee has said.

There was a build up of short positions in the Adani scips prior to the January 24 release of the Hindenburg report, and substantial profits were booked thereafter as stocks crashed, the 178-page report said.

A “short” position is generally the sale of a stock one does not own.

Investors who sell short believe the price of the stock will decrease in value. If the price drops, they can buy the stock at the lower price and make a profit.

Also Read | Hindenburg-Adani case | Supreme Court-appointed expert panel ‘clears’ SEBI

Hindenburg’s report claimed that the Adani empire was the “biggest con in corporate history” engaged in a “brazen stock manipulation and accounting fraud scheme”.

Shares of Adani Group, which denied all allegations, likening the U.S. investment firm’s report to an attack on India, fell after the Hindenburg report was published on January 24.

As the report stirred a political row and petitions were filed for a probe into the empire helmed by billionaire Gautam Adani, the Supreme Court on March 2, constituted the expert committee to investigate if there was any failure to disclose transactions with related parties and if stock prices were manipulated.

The expert committee headed by former SC Judge A.M. Sapre found no regulatory failure during the sharp rise in prices of Adani Group companies between March 2000 and December 2022 and their dramatic meltdown after January 24.

“While there was no adverse observation with respect to Adani scips in the cash segment, suspicious trading has been observed on the part of six entities. These are four FPIs, one body corporate and one individual,” the report said.

The report did not name any of the six.

“The trading pattern here is suspicious because of the build up of short positions by these entities in the Adani scrips prior to the Hindenburg report, and substantial profits earned by them by squaring off their short positions after publication of the Hindenburg report on January 24, 2023,” the expert committee said.

A detailed investigation is being carried out in respect of the trading of the six entities.

“These being matters under investigation, and the factual findings at this stage being prima facie in nature, the Committee is not delving into the details and names of these persons, or commenting upon the quality of the prima facie evidence.

“The committee wishes to ensure that the position of the respective parties, including SEBI, is not compromised either way when investigations are pending,” the report said.

Financial crime-fighting agency Enforcement Directorate (ED) “found intelligence about potentially violative and concerted selling by specific parties just ahead of the publication of the Hindenburg report, and this may lead to credible charges of concerted destabilisation of the Indian markets, and SEBI ought to be probing such actions under securities laws,” it said citing a response from ED.

The report said an analysis in trading of apples-to-port group’s flagship firm, Adani Enterprises Ltd (AEL) shares in four patches between March 1, 2020, and December 31, 2022, a month before publication of the Hindenburg report and meltdown of Adani shares, showed the state-owned LIC was the biggest loser as it sold offs 50 lakh shares of the company when prices hovered around ₹300 and bought 4.8 crore shares when the prices ranged between ₹1,031 and ₹3,859.

After a detailed scrutiny of the movement of prices of Adani shares and their sale and purchase by different entities, the committee found no evidence of price manipulation of stocks by firms linked to the Adani Group.

Trading in AEL shares was analysed in four periods — March 1, 2020, to August 31, 2020, (Patch-1), September 1, 2020, to September 30, 2020, (Patch-2), October 1, 2020, to March 31, 2021, (Patch-3) and April 1, 2021, to December 31, 2022, (Patch-4).

Stock market regulator Securities and Exchange Board of India (SEBI) informed the committee that “while the price of AEL shares rose significantly, there was no evident pattern of manipulative contribution of price rise which could be attributed to any single entity or group of concentrated entities.”

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LIC share price: LIC nears all-time low on fears of loss in Adani Group portfolio | India Business News

LIC share price: LIC nears all-time low on fears of loss in Adani Group portfolio | India Business News

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MUMBAI: Shares of Life Insurance Corporation (LIC) fell more than 1% in Friday’s relatively weak market over concerns about the insurer’s exposure to the Adani Group. At close, the LIC stock was at Rs 585, just a tad above its all-time low level of Rs 582. Shares of the Adani Group continued their relentless decline, dragging down the valuation of the corporation’s investment in the group.
Although Adani Group insiders insisted that LIC had booked some profit in January this year when the stock prices were near their 52-week highs, the insurance major is yet to come out with any statement about the profit or loss status in its Adani portfolio. According to the last disclosures made to the BSE (see graphic), LIC’s biggest investment was in Adani Ports & SEZ, in which it had a 9.1% stake. It also held between 1.25% and 6.5% stakes in six other Adani Group companies. In the last one month, LIC’s stock has lost nearly 17% of its value.

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Friday’s session saw seven of the 10 Adani Group’s stocks closing in the red. Of these seven, four stocks — Adani Total Gas, Adani Green Energy, Adani Transmission and Adani Power — closed at their 5% lower circuit level. Group flagship Adani Enterprises also closed 5% lower, but circuit breakers do not apply to this stock since it’s among those on which derivatives trading is allowed. Among other laggards, Adani Wilmar closed 3.3% lower while NDTV was down 4.1%. Of the remaining stocks, Ambuja Cements closed 2.4% higher while Adani Ports & SEZ was up 1.2%, and ACC closed unchanged.

Earlier this month, replying to a parliament query, the government had disclosed that LIC’s purchase value of equity in Adani Group companies was Rs 30,127 crore. It was also mentioned that the market value of this portfolio at the close of market hours of January 27 was Rs 56,142 crore.
The stock prices of Adani Group companies have been on a southward journey for a month since US short-seller Hindenburg Research published a damning report against the Adani Group, accusing it of accounting fraud, stock price manipulation and corporate malfeasance. Still, the bleeding has not yet stopped for almost all of the Adani Group’s 10 listed stocks.

In its report, Hindenburg had said that if one went purely by the accepted valuation metrics and comparative valuations of its peers, seven of the group’s stocks (that have Adani in their name) should correct by at least 85%. “Compared to industry peers, we see 85%+ downside (for Adani Group stocks) purely on fundamentals,” the report had said.

After Friday’s 5% circuit-breaking close, Adani Total Gas has now lost nearly 81% of its value. And if one considers its fall from its 52-week high level, recorded in April 2022, the stock is down by 84%. Two more stocks also are nearing Hindenburg’s ‘85% downside’ mark — Adani Green Energy has lost nearly 75% in the last one month while Adani Transmission is down 74%.
The slide in the group’s stock prices has wiped out Rs 12 lakh crore, or nearly $146 billion, worth of its market value in the last one month. Compared to a combined market capitalisation of Rs 19.2 lakh crore on January 24, on Friday it was down to Rs 7.2 lakh crore.

IndusInd chairman quits Adani co board
Sunil Mehta, chairman of IndusInd Bank, has stepped down from the board of Adani Green Energy as the private lender has granted credit facilities to the company. The RBI had cleared the appointment of Mehta on January 31 and shareholders will soon vote to ratify the appointment.
RBI’s rules do not permit bank directors to be on the board of companies their bank lends to. Mehta, in a letter to Adani Green Energy, said that the credit facilities were granted before his appointment on the board of the bank. “In view of the applicable statutory/regulatory restrictions, the bank has requested me to relinquish my directorship in AGEL at the earliest as it will otherwise constrain the bank from renewing / rolling over credit facilities till the continuation of my directorship in AGEL,” said Mehta in his letter.
IndusInd Bank said that the board of directors in their meeting on Thursday decided to hold a postal ballot on a special resolution to appoint Mehta as chairman for three years up to January 30, 2026.
Mehta, who is the chairman and MD of SPM Capital Advisors, a boutique business advisory and consulting firm, was earlier the chairman of Yes Bank in the government-appointed board. An insurance industry veteran, Mehta was the non-executive chairman of Punjab National Bank from March 2017 to February 2020.

Hindenburg's predictions about Adani stocks come true? Group's net worth dips below $44 billion

Hindenburg’s predictions about Adani stocks come true? Group’s net worth dips below $44 billion



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Congress writes to RBI & Sebi, seeks probe into Adani case | India News

Congress writes to RBI & Sebi, seeks probe into Adani case | India News

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NEW DELHI: Claiming that the ‘PM-blessed’ Adani group is facing trouble raising funds abroad while being “heavily over-leveraged”, Congress on Wednesday wrote to the Reserve Bank of India asking for “implicit or explicit government assurances” given to the business conglomerate about a future bailout in case of financial troubles with foreign entities.
The AICC has also asked Sebi for a probe into the “overvalued” Adani scrips, and why was a high exposure of top public companies like LIC and SBI allowed into the group which has cost ordinary Indians crores of rupees in the recent market turbulence.
Congress general secretary Jairam Ramesh shot off letters to RBI chairman Shaktikanta Das and Sebi chairperson Madhabi Puri Buch, demanding probes into allegations of financial irregularities and stock manipulation, including round tripping and use of shell companies to over value the stocks, against the “influential business house”.
Addressing Das, Ramesh said RBI should ensure that “excessive debt exposure” by the Adani group does not destabilise India’s banking system, talking of a possible “contagion”. “The Adani group has been described as ‘deeply over-leveraged’ – if the Adani group has artificially inflated the value of its stock through manipulation by offshore shell companies and raised funds by pledging those overvalued shares, the recent sell-off in stock prices is creating vulnerabilities for the Adani group to find financing, and by implication for India’s banking system,” he noted, specifically seeking RBI focus on real Adani group exposure of the Indian banking system and the possible government guarantees to the Adanis that it will be given a bailout should foreign funding dry up.
“Will RBI ensure that Indian banks are not forced to step in to substitute for any shortfall in foreign financing, especially given the Adani group’s political connections,” Ramesh asked.
Talking about charges of manipulation against the business group in his letter to the Sebi chief, Ramesh said, “Apart from the potential violation of several Indian laws, this goes against everything that Sebi stands for. We urge you to investigate all potential violations and ensure complete transparency about who is investing in Adani group companies.”
He said inclusion of Adani Enterprises in the “National Stock Exchange Nifty 50 index” in September 2022 occurred despite the firm’s weak fundamentals, an excessive price-to-earnings ratio and a tiny free-float. He complained that the stock remains in key Indian indices despite global indices having suspended the group.



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Congress’ Jairam Ramesh writes to RBI, SEBI chiefs seeking probe into allegations against Adani Group

Congress’ Jairam Ramesh writes to RBI, SEBI chiefs seeking probe into allegations against Adani Group

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Congress General Secretary in-charge Communications Jairam Ramesh Wednesday said he had written to Reserve Bank of India (RBI) Governor Shaktikanta Das and Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch seeking a probe into the allegations levelled against the Adani Group by New York-based-Hindenburg Research.

In his letter, Ramesh urged the central bank to look into two aspects of the issue: “One, what is the true Adani exposure of the Indian banking system? Two, what are the explicit and implicit guarantees that the Adani Group has been given that it will be bailed out by Indian banks if foreign funding dries up?”

Ramesh wrote that the RBI “must ensure that risks to financial stability are investigated and contained”.

In his letter to the SEBI chief, meanwhile, Ramesh called for an investigation that is “fair and complete, with no favour”.

“Any failure to do so will cast a shadow on Indian corporate governance and on India’s financial regulators, and could affect our ability to raise funds globally,” the letter read.

Ramesh also questioned why Life Insurance Corporation (LIC) and the State Bank of India (SBI) have heavily bought Adani Group equity.

“LIC, which 30 crore Indians trust with their life savings, has lost thousands of crores in Adani Group stock in recent days. Should we not ensure that such public sector financial institutions are more conservative in their investments than their private sector counterparts and free from pressure from above?” he wrote.

After the Hindenburg report alleged stock manipulation and fraud by the conglomerate, share prices of companies in the Adani Group have dropped significantly. The Adani Group has denied all allegations, and accusing Hindenburg of being “an unethical short seller”, and saying its report is a “lie”.

During the budget session of Parliament which ended earlier this week, Opposition lawmakers led by the Congress repeatedly disrupted proceedings in both Houses to demand a probe on the Adani Group crisis either by a Joint Parliamentary Committee (JPC) or a Supreme Court-monitored probe.



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Adani vs Hindenburg saga: 10 things which have happened so far

Adani vs Hindenburg saga: 10 things which have happened so far

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NEW DELHI: Amid reports of cut in growth targets and capex, Adani Group on Monday said that its growth plans are intact, business plans are fully funded and it remains confident of delivering returns to shareholders.
“Once the current market stabilizes, each entity will review its own capital market strategy, be rest assured, we are confident in the continued ability of our portfolio to deliver superior returns to shareholders,” Adani spokesperson said.
The Adani crisis has sparked worries of financial contagion in India and ability to carry on infrastructure projects.
After US short-seller Hindenburg Research released the report on January 24, stock of Adani Group companies have been in free fall, resulting in wipeout of over $120 billion in their market value.
The report had accused that Adani Group pulled “the largest con in corporate history” using offshore tax havens and stock manipulation.
Here’s a look at the recent happenings in the Adani-Hindenburg saga:
* Govt to set up panel to strengthen regulatory mechanisms
The Centre has agreed to the Supreme Court’s proposal to set up a panel of experts to look into strengthening the regulatory mechanisms for the stock market in the wake of the recent Adani group shares crash triggered by Hindenburg Research’s fraud allegations.
Saying it has no objection to constituting the panel, the Centre, at the same time, stressed that market regulator Securities and Exchange Board of India (Sebi) and other statutory bodies are “fully equipped”, not only regime wise, but otherwise also to deal with the situation. It also wanted to be allowed to provide details such as names and the scope of the panel’s mandate in a “sealed cover”.

The SC last week had said the interests of Indian investors need to be protected against market volatility in the backdrop of the Adani stocks rout and asked the Centre to consider setting up a panel of domain experts headed by a former judge to look into strengthening the regulatory mechanisms.
* ‘Healthy balance sheets’
Ever since the release of the Hindenburg report, Adani Group has denied all allegations posed by it. In repsonse, they termed the accusations to be “malicious”, “baseless” and a “calculated attack on India”.
The Group called Hindenburg the “Madoffs of Manhattan”, referring to the late financier and fraudster Bernie Madoff.
“Balance sheet of each of our independent portfolio companies is very healthy,” Adani Group spokesperson said. “We have industry leading development capabilities, strong corporate governance, secure assets, strong cash flows, and our business plan is fully funded.”

* Sebi probing allegations
Market regulator Sebi told the Supreme Court on Monday that it was nquiring into the allegations made against the Adani Group of companies by Hindenburg Research.
“Sebi is already enquiring into both, the allegations made in the Hindenburg report as well as the market activity immediately preceding and post the publication of the report,” the regulator said in the filing, adding the matter was in early stages of examination.
“Sebi is strongly and adequately empowered to put in place regulatory frameworks for effecting stable operations and development of the securities markets,” it added.
* Pre-payment of loans
Ahead of their scheduled payment to release pledged shares in 3 listed companies, Adani Group has paid off $1.1 billion (Rs 9,203 crore) worth of loans.
According to a media statement, Adani’s early repayment will release 12% of his holding in Adani Ports, 3% in Adani Green and 1.4% in Adani Transmission.

Adani prepaid the borrowings much before their maturity time of September 2024 “in light of recent market volatility and in continuation of the promoters’ commitment to reduce overall promoter leverage backed by Adani listed company shares”.
* Pledging of extra shares
The group has now pledged additional shares for State Bank of India (SBI). Adani Ports and Special Economic Zone (APSEZ), Adani Transmission and Adani Green Energy pledged shares to SBICAP Trustee Company, a unit of India’s biggest lender, SBI.
As many as 75 lakh more shares of APSEZ have been pledged, taking the total to 1 per cent of all shares with SBICAP. In the case of Adani Green, pledge of 60 lakh more shares took the total to 1.06%.

* Adani hires most expensive law firm in US
Wachtell, Lipton, Rosen & Katz, one of the most expensive law firms in New York has been roped in by the Adani Group to fight the case against allegations levied by Hindenburg in its report.
According to a report in the Financial Times, Wachtell was approached by Mumbai-based law firm Cyril Amarchand Mangaldas, which is leading the defence of Adani Group.

* MSCI cuts down weightage of Adani stocks
Global stock index provider MSCI has changed the weightage for four Adani Group stocks that are constituents in its indices and are closely tracked and benchmarked to by global fund managers.
MSCI re-asssessed the size of some companies’ free floats, having determined there was “sufficient uncertainty” surrounding some investors in Adani companies. It embarked on the review after feedback from market participants.

* Total keeps investments on hold
Last week, French oil major TotalEnergies — one of the largest foreign investors in Adani Group — said it would wait for the result of an independent audit before proceeding with investing in Adani Group’s $50 billion plans to make green hydrogen.
It has now further decided to pause $4 billion investment in the green hydrogen venture, pending audits.
A report by the Economic Times said it could be a big blow for te new venture’s timelines of production of green hydrogen at $1 per kg by 2030.

* Rating agencies report
Rating agencies have continued to be cautious on Adani Group stocks, with most of them downgrading the outlook to negative in the past 1 week.
Moody’s announced the a downgrade of the ratings outlook to negative from stable for four firms – Adani Green Energy, Adani Green Energy Restricted Group, Adani Transmission Step-One Ltd and Adani Electricity Mumbai Ltd.
“These rating actions follow the significant and rapid decline in the market equity values of the Adani Group companies following the recent release of a report from a short-seller highlighting governance concerns in the group,” Moody’s said.
Meanwhile, Fitch Ratings last week said that the exposure of Indian banks to the embattled Adani Group is “insufficient in itself” to present a substantial risk to the credit profiles of these lenders.

* Govt, RBI chief respond
Amid crisis plaguing the Adani Group, finance minister Nirmala Sitharaman said that regulators like Sebi, RBI should always be “on their toes” and act in time to keep the markets stable.

Speaking to Times Now about the massive stock rout of Adani following allegations by Hindenburg Research, the finance minister said that she does not have any view on the report but added that banks and insurance companies who are facing exposure are themselves speaking out and reassuring the common man.

Meanwhile, RBI governor Shaktikanta Das said that the Indian financial sector is resilient and would not be affected by an individual incident.
Finance secretary TV Somanathan also assured that the exposure of any nationalised bank or insurance company in Adani group companies should not be a cause for any concern for the depositors, policy holders or investors.

The exposure of the State Bank of India and the Life Insurance Corporation in any company is far below the level where it should concern the investors, he had said.



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AAP to protest outside BJP headquarters in Delhi over Adani issue

AAP to protest outside BJP headquarters in Delhi over Adani issue

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After leading a walkout over the issue from the Rajya Sabha earlier this week, the Aam Aadmi Party (AAP) will hit the streets in Delhi Sunday with its demand for a Joint Parliamentary Committee (JPC) probe into businessman Gautam Adani’s alleged misdemeanours.

The party is scheduled to protest outside the Bharatiya Janata Party (BJP)’s headquarters on Deen Dayal Upadhyay Marg at noon.

AAP RS MP Sanjay Singh had, along with Bharat Rashtra Samithi’s K Keshav Rao, on Thursday, given a suspension notice under Rule 267 demanding a discussion on the row with Adani at its core. It was, however, rejected by Rajya Sabha Chairman and Vice-President Jagdeep Dhankhar.

Singh had given a similar notice demanding suspension of business to discuss the loss to public sector banks and the LIC, after the Hindenburg report, on Wednesday which too had been rejected by Dhankhar.

Leader of Opposition Mallikarjun Kharge had, on the same day, attacked the BJP-led Centre over the issue and dared it to a JPC if it was not afraid of the findings.



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Adani Group mulls independent review after short-seller’s criticism

Adani Group mulls independent review after short-seller's criticism

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BENGALURU: Adani Group is considering independent evaluation of issues relating to legal compliance, related party transactions and internal controls following a US short-seller’s critical report on its businesses, disclosures showed on Tuesday.
The group, led by billionaire Gautam Adani, has been roiled by days of market turmoil after Hindenburg Research on January 24 alleged it had engaged in stock manipulation and used tax havens. It also said the group had unsustainable debt.
Adani Group has denied the allegations, saying it complies with all laws and has made necessary disclosures over time. Nonetheless, investors dumped its shares as concerns of financial contagion grew.
The quarterly earnings disclosures of three Adani units — Adani Green Energy, Adani Ports and Special Economic Zone and Ambuja Cements — noted that a short seller had alleged “certain issues against some” Adani group entities, saying for the first time they may be looked into.
“The management of Adani group entities are evaluating an independent assessment, basis the requisite corporate approvals, to look into the issues and compliance of applicable laws and regulations, transaction specific issues,” Adani Green said in its quarterly earnings filing, without describing the issues.
While Ambuja’s filing was similar, Adani Ports said it would evaluate an independent assessment on the matter, if required.
The disclosure comes as shares of Adani Group rallied on Tuesday, a day after it prepaid some loans, bringing relief to investors that have seen $113.6 billion wiped off the conglomerate’s market value since the Hindenburg Research report two weeks ago.
The crisis is one of the biggest reputational challenges for 60-year-old Adani, whose fortunes surged in recent years along with his stock prices, before the Hindenburg jolt. In a major setback for the billionaire, the market rout also forced him to shelve a key $2.5 billion share sale last week.
Moody’s rating agency has warned the share-price plunge could hit the group’s ability to raise capital, while India’s central bank has started checking on lenders’ exposure to it.
On Monday, Adani Group said it would pre-pay $1.11 billion of loans on shares. Separately, JPMorgan on Tuesday said the group companies were still eligible for inclusion in the bank’s bond indexes.
The group’s flagship company Adani Enterprises closed up 14.6% on Tuesday, still around half the level seen before the Hindenburg report was released.
Adani Enterprises’ recovery from its lows has attracted a lot of traders to the stock, said Ambareesh Baliga, a Mumbai-based independent market analyst.
“Monday’s announcement of them able to close over $1 billion loans also worked in their favor. Fundamentally speaking, looking at the issues which are there, the stock is still quite expensive,” he said.
The cumulative losses of Adani group’s seven listed companies still stand at $109 billion despite Adani Ports also gaining 1.4% on Tuesday and Adani Wilmar adding 5%.
Adani Green, Adani Total Gas Ltd and Adani Power, all however ended 5% lower.
After hundreds of members of India’s main opposition Congress party took to the streets on Monday pressing for a probe into Hindenburg’s allegations, dozens of activists from its youth wing gathered outside the Life Insurance Corporation’s office in New Delhi on Tuesday, carrying posters questioning why investigating agencies have remained silent.
Many Adani group companies report results this week. Adani Ports posted a lower quarterly profit on Tuesday as foreign exchange losses soared, and said it would pay back Rs 5,000 crore ($605 million) – or 13% of its net debt – in the new fiscal year from April.
Adani Green reported a more than two-fold jump in quarterly profit.



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Adani row: Congress to launch nationwide protests outside LIC, SBI office on Monday

India Today Web Desk

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Congress said that the protest would be carried out as the Opposition was not given “even a minute” to raise the Adani issue in Parliament.

India Today Web Desk

New Delhi,UPDATED: Feb 5, 2023 23:55 IST

Congress to stage protests outside SBI banks in Delhi on Monday. (Representational Image)

By India Today Web Desk: Against the backdrop of the controversy about the Adani Group over allegations of financial irregularities and market manipulation, Congress has called for nationwide protests outside State Bank of India (SBI) branches and Life Insurance Corporation (LIC) offices on Monday. The party’s youth wing is also slated to organise a demonstration on the issue in Delhi outside the banks located at Parliament police station.

While Congress MPs will protest near the Gandhi statue inside Parliament, as per news agency ANI.

The announcement came a day after Congress general secretary KC Venugopal said the party will stage a nationwide protest in front of LIC and SBI offices across the country on February 6. In Parliament, the Opposition alleged that the recent fluctuation in Adani Group shares is a scam that involves common people’s money as public sector LIC and SBI have invested in them.

ALSO READ | Committed to ensuring market integrity, measures in place to address volatility: Sebi

Congress said that the protest would be carried out as the Opposition was not given “even a minute” to raise the Adani issue in Parliament.

The grand old party sought answers from the government, alleging that the Modi government’s “loud silence” over the issue “smacks of collusion”.

Adani group stocks have taken a beating in the Indian share market after a US-based short-seller firm, Hindenburg Research, made a litany of allegations against the conglomerate, including fraudulent transactions and share price

The conglomerate’s share prices plunged, losing more than half of its market value since Hindenburg Research levelled allegations pertaining to tax havens, laundering and stock manipulation.

ALSO READ | ‘Hum Adani ke hain kaun’: Congress questions PM Modi’s silence on Adani Group stock rout

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Feb 5, 2023

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