Adani Group shares fall further, and the market cap drops below Rs 8 lakh crores again.\u00a0 The group shed nearly Rs 53,000 crore in market value to Rs 7.55 lakh crore on Wednesday after its stocks dropped between 4% and 11%. The group\u2019s flagship, Adani Enterprises, declined 11% to close at Rs 1,400.85, whereas Adani Ports fell 6.72% to end at `544. Adani Power, Adani Transmission, Adani Green Energy, Adani Wilmar, and Adani Total Gas, dropped 5% \u2014 the lowest tradable limit of the day.<\/p>\n
With the Adani \u201cscam\u201d hot on the heels of most drawing room topics with different opinions clashing, some saying it would not affect the economy, others stating this was an attack on India, others declaring firmly the economy is going to crash. The Adani Group\u2019s market losses balloon to around $65 billion despite its attempts to assuage investors.\u00a0 The follow-on public offer of Adani Enterprises closes, oversubscribed 1.12 times.<\/p>\n
Amid a row over alleged malpractices in the Adani Group of companies, as cited in the Hindenburg report, Finance Minister Nirmala Sitharaman said markets regulator Sebi should be given time to understand what happened.<\/p>\n
“I think Sebi should be given time to come up clearly on understanding how this happened & what has actually happened\u2026 I think it is now time for them to get a comprehensive picture and I am sure they would do it,” Sitharaman said in an interview to ET NOW.<\/p>\n
Recently, when the price of milk went up by three rupees, economically minded Indians took to analyzing that Gautam Adani\u2019s market crash will put pressure on the common citizens by raising taxes and prices of goods.<\/p>\n
In all this, leaders are questioning Prime Minister Narendra Modi\u2019s silence. Amid the ongoing controversy over the Adani row, Aam Aadmi Party leader and Rajya Sabha MP Sanjay Singh launched an attack on Prime Minister Narendra Modi and alleged that the world\u2019s biggest scam took place under the rule of the world\u2019s biggest leader. \u201cWe are demanding a JPC probe into the Adani-Modi mega scam. AAM, BRS, and all opposition parties are demanding this. Overvaluing your shares and then lending from banks is a fraud in India. People are worried, they want answers. World\u2019s biggest scam took place under the rule of the world\u2019s biggest leader, and still, the Prime Minister is silent,\u201d said Sanjay Singh.<\/p>\n
When extra power is given to one source and it falls, it ruins the rest of the markets and this destabilizes the nation, not only economically but also politically.<\/p>\n
Congress MP Rahul Gandhi claimed on Wednesday that Prime Minister Narendra Modi was protecting industrialist Gautam Adani by not ordering an inquiry into allegations of stock manipulation and accounting fraud made by United States-based investment firm Hindenburg Research.<\/p>\n
\u00a0<\/strong>The common people of India will lose all their money and promised profits from the Adani Group.\u00a0 Fitch said that the Adani group incident can damage India’s medium-term economic growth as the negative spillover of the crisis at the metal-to-mining conglomerate could make borrowings costlier for broader Indian corporates, though such risks are low.<\/p>\n Voices of people in the country are angry and expressing \u201cWe are made to pay for them, the difference is, a loan defaulted by Adani or any Crony friend of Modi, will increase OUR fuel price.\u201d\u00a0 We all know with the increase of fuel, prices will explode over the country on every other commodity in India, spiking inflation, which is already on the rise.\u00a0 The price of milk increased by Rs. 3.\u00a0 A citizen expressed, \u201cA loan defaulted by you will see your home put up for auction. In all loan defaults, the payer is you and me.\u201d<\/p>\n It is no small matter when Bloomberg announced that till now, the group’s ten stocks have lost around $120 billion, or more than half of their combined value. On February 1, Adani Enterprises called off a fully subscribed, $2.5 billion Follow-on Public Offer (FPO).<\/p>\n Headquartered in Ahmedabad, the powerful firm, according to its website, aims to build \u2018stellar infrastructure assets and contribute to nation-building.\u2019 Its vision is to \u2018become a world-class leader in businesses that enrich lives and contribute to nations in building infrastructure through sustainable value creation. At the Bombay Stock Exchange (BSE) on Friday, the stock of Adani Enterprises tumbled 20% to \u20b91,173.55, a 12-month low, PTI reported.\u00a0 A lot of dreams will be smashed in this fall.<\/p>\n Trading in the Adani firm was suspended several times; multiple instances of fall in its shares triggered these blockages.<\/p>\n When the National Stock Exchange (NSE) put Adani Enterprises and another group company, Adani Ports, under a surveillance mechanism that will need a 100% margin to trade in their shares.\u00a0 The faith in the Adani group is lost globally and investments will fall through, incurring massive losses.<\/p>\n On February 7, Adani Enterprises will not feature on the S&P Dow Jones Indices, the latter announced on Thursday.<\/p>\n On Thursday morning, in a rare video message, Gautam Adani addressed investors on the withdrawal of the FPO, saying the board \u2018strongly felt it wouldn\u2019t be morally correct to move forward with the offer.’ He, however, assured them that the decision will not impact the existing operations and future plans.<\/p>\n \u201cThere will be more volatility in India this year; hence the market is prone to a correction,\u201d Bernstein analyst Venugopal Garre wrote in a Monday note as Adani shares continued to tumble.<\/p>\n The Reserve Bank of India said, \u201cthe banking sector remains resilient and stable,\u201d citing its own assessment of the current situation.<\/p>\n The Bloomberg Billionaires Index showed founder and chairman Gautam Adani\u2019s net worth further on Friday, as his net worth fell by more than 51.1%, or $61.6 billion, year-to-date. Shares of most Adani Group companies fell further on Monday, continuing to drop as a feud between the conglomerate and short-seller firm Hindenburg deepened.<\/p>\n Adani Enterprises lost 4%, and Adani Transmission fell 10% in Mumbai\u2019s morning session. Adani Green Energy, Adani Power, and Adani Total Gas fell 5% each. Adani Port and Special Economic Zone bucked the trend and traded 2% higher, but they remained volatile.<\/p>\n Bernstein warned there will be more pain ahead in its latest \u201cIndia Strategy\u201d report.\u00a0 \u201cThere will be more volatility in India this year; hence the market is prone to a correction,\u201d analyst Venugopal Garre wrote in a Monday note. \u201cThe best way to pick up such transactions is to look for arbitrages in implied growth.\u201d<\/p>\n LIC has made an investment of Rs 35,000 crore in the Adani shares. As per LIC’s official statement, its value of it even today is Rs 56,000 crores. So, they claim there is no loss notionally. There is no profit also notionally.<\/p>\n However, fraud allegation has triggered a rout in Adani group company stocks. The rout has also threatened the value of investments made by the Life Insurance Corporation (LIC) and public sector banks. Adani group stocks, where LIC is heavily invested, have lost over USD 100 billion in value since a small New York short seller came out with a\u00a0 report alleging financial and accounting fraud by the ports-to-energy conglomerate.<\/p>\n The Opposition says the Adani Group’s exposure to public sector banks like the SBI and LIC has a huge impact on middle-class savings.\u00a0 The State Bank of India accordingly has received loans up to $2.6 billion to companies in the Adani conglomerate from the largest financier, or about half of what is allowed under rules.<\/p>\n It is revealed that the SBI\u2019s exposure includes $200 million from its overseas units. Dinesh Kumar Khara, chairman of SBI, said earlier that the badly-hit Adani Group companies who were servicing the loans may not experience an immediate challenge\u201d to whatever the bank has lent so far.<\/p>\n While the tremendous downfall of Adani’s share is causing panic, Union Finance Minister Nirmala Sitharaman does not see it as a season to panic seeing it as well within the permissible limits as stated by these lenders.<\/p>\n A New York Times article stated that the crisis could break confidence in the rest of the Indian stock market as at their peak, Adani shares accounted for more than 6% of India\u2019s two main exchanges; today, the figure is barely 3%. \u201cMore troublingly, Adani\u2019s fall could jeopardize the idea of India as the world\u2019s next great hope as a driver of global economic growth,” it said.<\/p>\n India’s top banker Uday Kotak said, \u201c…..large Indian corporates rely more on global sources for debt and equity finance. This creates challenges and vulnerabilities. Time to further strengthen Indian underwriting and capacity building,” he said in a recent tweet.<\/p>\n Though the upheaval in the value of shares of the Gautam Adani group due to allegations by a US-based investment research firm will not have any impact on India’s economy, Union Minister Gajendra Singh Shekhawat said on Sunday.<\/p>\n “I feel the share (value) of a private company would hardly have anything (impact) to do with the economy of the country. I think it is a normal process. The company’s shares had witnessed ups and downs in the past,” the Union Jal Shakti minister told reporters after being queried about developments connected to the billionaire businessman’s conglomerate<\/p>\n The brutal selloff has also hit India\u2019s weighting in MSCI\u2019s emerging-market benchmark, giving away its second spot to Taiwan after a rally in the latter\u2019s market. As of the end of January, Taiwan\u2019s weighting in the MSCI Emerging Markets Index rose to 14.2%, behind leader China\u2019s 31.2%, while India\u2019s fell to the third spot with 13%, according to Bloomberg-compiled data. India captured the second spot from Taiwan in August, however, the MSCI India Index has lost 4.2% this year, as per data by Bloomberg.<\/p>\n Adani group’s dominance in India\u2019s clean energy industries could start a slowdown in the pace of investment amid the country’s ambitious plan to reduce emissions, as per experts. Hindenburg Research\u2019s allegations about companies linked to Adani Group have raised doubt on the firm\u2019s future, including its massive green energy investment, possibly creating problems for Adani Green, the group\u2019s renewable energy arm. Adani Group has pledged $70 billion investment in green energy infrastructure.<\/p>\n Kapil Vaidya @KapilVaidya21\u00a0Jan 29<\/p>\n I cannot fathom the conversation I just had with a relative\ud83d\ude16<\/p>\n The guy lost 2 Cr. In the #Adani fiasco<\/p>\n He was carrying 67 lots in total & couldn\u2019t square off on Friday<\/p>\n when the fall started he completely froze. \ud83d\ude35<\/p>\n #Hindenburg<\/p>\n I cannot fathom the conversation I just had with a relative\ud83d\ude16<\/p>\n The guy lost 2 Cr. In the #Adani<\/a> fiasco <\/p>\n He was carrying 67 lots in total & couldn\u2019t square off on Friday <\/p>\n when the fall started he completely froze. \ud83d\ude35 #Hindenburg<\/a> pic.twitter.com\/KxjwjSg4vr<\/a><\/p>\n — Kapil Vaidya (@KapilVaidya21) January 29, 2023<\/a><\/p><\/blockquote>\nAdani group’s ten stocks have lost around $120 billion<\/strong><\/h4>\n
Trading was suspended several times<\/strong><\/h4>\n
\u00a0<\/strong>Others are losing faith in Adani Groups<\/strong><\/h4>\n
LIC lost over USD 100 billion in value<\/strong><\/h4>\n
LIC has a major impact on middle-class savings<\/strong><\/h4>\n
\u00a0<\/strong>Adani crisis can smash faith in the rest of the Indian stock market as at their peak<\/strong><\/h4>\n
The brutal selloff has also hit India\u2019s weighting in MSCI\u2019s emerging-market benchmark<\/strong><\/h4>\n
Adani group’s dominance in India\u2019s clean energy industries could start a slowdown<\/strong><\/h4>\n
Voices of criticism<\/h2>\n
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