NEW DELHI: Union finance minister Nirmala Sitharaman said here on Saturday that the cancellation of Adani Enterprises’ follow-on public offer (FPO) will not have any impact on the economy and no effect on the image of the economy.
Responding to queries on the crash of
Adani Group shares, the finance minister said, “Regulators will do their job, and they are independent of the government. It is up to them to do what is appropriate. To keep the market regulated and in prime condition is the role of Sebi, and it has done that.”
Sitharaman said RBI had already issued its statement on the Adani issue, and public sector banks and LIC had issued statements on their exposure to the group.
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Adani Group firms lose over $100 billion: Things to know
Show Captions
<p>Shares of Adani Group companies have been in free fall ever since Hindenburg published its report alleging the group of stock manipulation and more.<br /><br /></p>
<p>Adani Group’s market losses swelled to more than $100 billion , sparking worries about their potential systemic impact.<br /><br /></p>
<p>Since Hindenburg’s report on January 24, Adani group companies have lost nearly half their combined market value.<br /><br /></p>
<p>The Gautam Adani-led Adani Group, who’s stocks were one of the key drivers of stock markets since the past 3 years, is now finding it hard to even stay in the positive zone since last 6 days.<br /><br /></p>
<p>On January 24, the day Hindenburg released this report, a share of Adani Enterprise costed Rs 3,442.75 at close of day’s trade. Today, the stock is priced at Rs 1,564.70, that is, a fall of 54.55% in ust 6 sessions.<br /><br /></p>
<p>Adani Ports has declined 39%, Adani Power 26.43%, Adani Transmission 43.49%, Adani Green Energy 45.75%, Adani Total Gas 56%, and Adani Wilmar fell by 26.46%.<br /><br /></p>
<p>Adani, 60, is also no longer Asia’s richest person, having slid in the rankings of the world’s wealthiest to 17th with net worth almost halved to $64 billion in a week, as per Forbes’ list.<br /><br /></p>
<p>Hindenburg’s report last week alleged an improper use of offshore tax havens and stock manipulation by the Adani Group. It also raised concerns about high debt and the valuations of seven listed Adani companies.<br /><br /></p>
<p>The Adani Group had denied the accusations, saying the short-seller’s allegation of stock manipulation had “no basis” and stemmed from an ignorance of Indian law.<br /><br /></p>
<p>In its official response to the Hindenburg report, Adani Group likened the damning allegations to a “calculated attack” on India, its institutions and growth story.<br /><br /></p>
<p>Adani Group decided not to proceed with its Rs 20,000 crore FPO in the interest of its subscribers. The FPO was called off a day after being fully subscribed.<br /><br /></p>
<p>Gautam Adani said that given the unprecedented market movement, the board of directors of company felt that going ahead with FPO will not be “morally correct”.<br /><br /></p>
<p>RBI has sought details about lenders’ exposures to the Adani Group, following market conditions.<br /><br /></p>
<p>Sebi has started examining the constant crash in shares of Adani Group. It is also looking into any possible irregularities in a share sale by its flagship company<br /><br /></p>
Swiss lender Credit Suisse stopped accepting bonds by Adani group companies as collaterals for margin lending. Citigroup’s wealth unit also said it has stopped extending margin loans to its clients against Adani securities.
A rout in the share price of Adani group companies had culminated in the group’s flagship company Adani Enterprises’ FPO being cancelled. On Friday, the FM said in an interview to a news channel that no matter how much the issue is discussed globally, it is not an indication of how well the financial markets are governed.
Addressing media on Saturday, Sitharaman said the FPO cancellation would have no impact on the economy’s fundamentals. “How did our foreign exchange reserves grow by $8 billion? Our macroeconomic fundamentals or our economy’s image has not been affected,” she said.
Sitharaman said that every market witnesses fluctuations, cancellation of FPOs and exits of foreign institutional investors. “How many times have FPOs been withdrawn and how many times has the image of the country suffered,” she asked.
Hindenburg vs Adani: ‘Regulators will do what needs to be done’ says, Nirmala Sitharaman
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