Adani Group’s seven listed companies face a $112 billion sell-off in less than two weeks as the opposition spreads protests.
Lawmakers from India’s main opposition party have sparked protests at some state-owned companies over the crisis at Adani Group, whose seven listed companies have seen another sell-off that has pushed their market losses to $112 billion in less than two weeks.
Members of the Congress party protested on Monday outside several offices of state-run Life Insurance Corporation (LIC) and State Bank of India (SBI), both exposed to Adani Group companies.
At one of the protest sites in Mumbai, people held banners reading “Save SBI”, television footage showed.
The crisis was triggered by a report by US-based Hindenburg Research, which accused the Adani Group of stock manipulation, unsustainable debt and the use of tax havens.
Adani Group, one of India’s leading conglomerates, brushed off the criticism and denied wrongdoing in detailed rebuttals, but that failed to stop its shares from falling unabated.
In the brutal aftermath of the Hindenburg report, Adani Group flagship Adani Enterprises Ltd was forced to abandon a $2.5 billion share sale last week, and Group Chairman Gautam Adani lost his title as Asia’s richest person and slipped down the global rich list.
Gautam Adani and Indian Prime Minister Narendra Modi are from the same state. Adani has rejected claims by Modi’s opponents that it has benefited from their close ties, and the Modi government has rejected claims of favoritism to Adani.
As Adani shares tumbled and cast a pall over Indian markets last week, opposition lawmakers disrupted parliament on Monday and demanded an investigation.
Credit rating alerts
The stock market crash triggered a series of credit rating warnings on Friday, with Moody’s saying the group could have trouble raising capital and S&P downgrading its outlook for two of the group’s companies.
Even attempts by regulators and the government to calm scared investors don’t seem to be working.
India’s central bank said on Friday that the country’s banking system remains resilient and stable. The next day, India’s market regulator said the country’s financial markets remained stable and continued to function in a transparent and efficient manner.
SBI said on Friday that it was not concerned about its exposure to the Adani group, but that further financing of its projects would be “assessed on its own merits”.
India’s investment sales secretary Tuhin Kanta Pandey told the Reuters news agency on Friday that LIC’s shareholders and customers should not be concerned about its exposure to the Adani group.
LIC has a 4.23 percent stake in flagship company Adani Enterprises, while other exposures include a 9.14 percent stake in Adani Ports and Special Economic Zone, Reuters said.
Shares in Adani Enterprises, which had risen more than 1,000 percent in five years before the crash, sank 9.6 percent on Monday, taking market capitalization losses to nearly $28 billion since the report was released.
Adani Transmission Ltd fell 10 percent, while Adani Green Energy Ltd, Adani Total Gas Ltd, Adani Power and Adani Wilmar fell roughly 5 percent.
Adani Ports was the only stock to buck the trend, rising 1.2 percent.