India’s economy resilient to Adani stock rout: Ashwini Vaishnaw

Vaishnaw said the impact of the Hindenburg-Adani row on broader equity markets is set to be short-lived.

“India has a very broad spectrum of infrastructure companies. Whatever blip is there on the stock market is not going to affect the overall economy. I am very sure of that,” Vaishnaw told Bloomberg News.

Separately, India’s chief economic adviser said the exposure of Indian banks and insurance companies to the Adani Group is limited.

Investors will look through the “short-term noise” in India, Venkatraman Anantha-Nageswaran said. “At this point, we are watching the situation”.

Earlier, State Bank of India chairman Dinesh Khara said its loans to the Adani Group are backed by cash-generating assets and overseas exposure is “nominal.”

Meanwhile, on Thursday, the Reserve Bank of India (RBI) asked all lenders for details of their exposure to the Adani group.

Additionally, embattled billionaire Gautam Adani shared a video message for its investors on Thursday. The 60-year-old tycoon spoke about the reason why the conglomerate pulled his flagship firm’s $2.5 billion domestic stock offering.

Adani has said the decision to withdraw a fully subscribed share sale of the flagship firm of his group was primarily because of volatility in the market.

Adani Group company stocks have lost over $90 billion n value since a US short seller made damning allegations.

Adani Enterprises Ltd’s ₹20,000 crore follow-on public offer managed to get investors on the last day of the share close on Tuesday. Late on Wednesday, the company decided to withdraw the FPO and refund the investors.

“After a fully subscribed FPO, yesterday’s decision of its withdrawal would have surprised many. But considering the volatility of the market seen yesterday, the board strongly felt that it would not be morally correct to proceed with the FPO,” Adani said in an address to investors on Thursday.

The decision, he said, will not have any impact on existing operations and plans. “We will continue to focus on timely execution and delivery of projects.”

The fundamentals of the company are strong, Adani asserted.

“Our balance sheet is healthy and assets robust. Our EBITDA levels and cash flows have been very strong and we have an impeccable track record of fulfilling our debt obligations. We will continue to focus on long-term value creation and growth will be managed by internal accruals.”

Adani said the group would review the capital market strategy once the market stabilizes.

“We have a strong focus on ESG and every business of ours will continue to create value in a responsible way. The strongest validation of our governance principles comes from several international partnerships we have built across our different entities,” he added.

Shares of Adani Enterprises tumbled 15% in morning trade on Thursday, a day after the firm said it has decided not to go ahead with its ₹20,000-crore Follow-on Public Offer (FPO) and will return the proceeds to investors.

The stock tanked 15% to ₹1,809.40 on the BSE.

Other group firms also continued to remain weak for the 6th day in a row, with shares of Adani Ports declining 14%, Adani Transmission falling 10%, Adani Green Energy (10%), Adani Total Gas (10%), Adani Wilmar (5%), NDTV (4.99%) and Adani Power (4.98%).

Many of the group firms also hit their lower circuit limits during the early trade.

Adani Group stocks have taken a beating on the bourses in the recent time after Hindenburg Research made a litany of allegations in its report, including fraudulent transactions and share price manipulation at the Gautam Adani-led group.

Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.