Adani crisis worsens as investors flee; Opposition demands probe

Credit: DH Graphic

The Adani Group crisis worsened on Thursday after the RBI asked banks to reveal their exposure to the ports-to-power conglomerate, some foreign lenders rejected its securities as collateral, and Opposition parties disrupted Parliament to demand a formal probe into the saga.

The news came a day after the Gautam Adani-led group abruptly called off a Rs 20,000-crore share sale at the nth hour, raising concerns about its future and further eroding its market value. The billionaire himself appeared in a video speech on Thursday to reassure investors as shares in Adani Enterprises, the group’s flagship firm, plunged 26.7 per cent to Rs 1,565.30.

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“The fundamentals of our company are strong. Our balance sheet is healthy and assets, robust. Once the market stabilises, we will review our capital market strategy,” said Adani, who slipped out of the world’s top-10 richest men list after occupying No. 3 spot.

Adani’s companies have lost about Rs 8.77 lakh crore in market value in a week after a report by US firm Hindenburg Research accused the conglomerate of accounting fraud and stock manipulation through offshore entities.

“While the tug of war is still going on between Adani and Hindenburg, it is quite clear that Adani has had very little auditory supervision, almost no coverage by analysts and the regulator has not taken any steps to investigate their business processes or price actions,” said Sonam Srivastava, founder and CEO of Wright Research.

There was a need for regulators to step up and clarify if there was any wrongdoing or lack thereof for all the capital market participants, Srivastava said.

Global banks also grew averse to the group. Citigroup’s wealth unit and Credit Suisse stopped accepting bonds of the conglomerate’s companies as collateral for margin loans to its private banking clients.