MUMBAI, Feb 13 (Portal) – India’s market regulator will brief the federal government on its probe into the Adani Group’s deferred share sale, two sources said, putting the spotlight on the watchdog in a week when its laws are also under scrutiny by the nation Supreme Court.
The upheaval at the Indian conglomerate, sparked by the news of a short seller last month, continued on Monday, with shares of listed companies extending losses.
Led by billionaire businessman Gautam Adani, the group’s seven listed stocks have lost about $120 billion in market value since a Jan. 24 report by US short seller Hindenburg Research accused them of abusing offshore tax havens and stock manipulation. so denied the allegations of the company.
The fallout has sparked concerns of financial contagion in India, protests in Parliament that lawmakers have called for an inquiry, rating downgrades of some Adani entities and cast a shadow over the company’s capital-raising plans. Gautam Adani has also lost his title as the richest person in Asia.
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The Securities and Exchange Board of India (SEBI) has investigated the group’s market crisis, including an investigation into trading patterns and possible irregularities in the $2.5 billion share sale of flagship company Adani Enterprises (ADEL.NS), which the Adani Group Portal previously reported that it had to make due for the slump in the share price.
The SEBI board will update Treasury Department officials on its investigation on February 15, the sources said, on condition of anonymity as they are not allowed to speak to the media.
SEBI and the Treasury Department did not immediately respond to Portal requests for comment.
India’s Supreme Court is expected to resume its hearing on Monday on petitions of public interest that raised concerns about the high investor losses sparked by Hindenburg’s report. The court has asked the market regulator to explain its regulatory framework and how to prevent such losses in the future.
Last week, Moody’s downgraded the rating outlook for some companies in the Adani group, while index provider MSCI announced that it would reduce the weighting of some companies in its equity indexes.
All Adani Group shares were under pressure on Monday. Adani Enterprises fell 8%, while Adani Total Gas (ADAG.NS), Adani Power (ADAN.NS) and Adani Transmission (ADAI.NS) each lost 5%.
Adani Total, a joint venture with France’s TotalEnergies (TTEF.PA), has lost 70% since the Hindenburg report, while Adani Enterprises has lost 50%.
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Bloomberg News reported on Monday that Adani has halved its revenue growth target and plans to scale back new investments. A company spokesman told Portal the report was “baseless, speculative” without elaborating.
After the Hindenburg Report was released, the Adani Group prepaid part of its $25 billion debt and pledged to independently verify the short seller’s claims, but the carnage in its securities continues.
“It will take at least three to six months for the impact of management’s attempts to reassure investors to be reflected in stock prices. The price damage was significant,” said Avinash Gorakshakar, head of research at Profitmart Securities.
Concerns about exposure to the Adani Group from Indian and foreign lenders have also surfaced in recent days. In its response to the Hindenburg allegations, the group referred to its international banking relationships as a sign of its strength.
Singapore-based DBS Group announced on Monday that it has a S$1.3 billion (US$976 million) exposure to Adani Group companies, of which S$1 billion is for financing of their cement business. It said it was not concerned about its exposure to the group.
“They’re solid, cash-generating companies, so we’re not concerned about the exposure,” CEO Piyush Gupta said at an earnings meeting, referring to the cement business that Adani acquired from Holcim (HOLN) for $10.5 billion last year. had acquired. S).
DBS was part of a group of banks that provided financing.
Reporting by Jayshree P. Upadhyay; Additional reporting by Anshuman Daga and Yantultra Ngui in Singapore, Bharath Rajeswaran in Bengaluru; Writing by Aditya Kalra; Edited by Savio D’Souza and Muralikumar Anantharaman
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