---
title: "Adani saga enters third week as officials jump in to calm nerves"
description: "Indian policy makers and regulators stepped in over the weekend to calm frayed nerves over concerns the turmoil surrounding billionaire Gautam Adani’s conglomerate would spill over into the local economy and affect global investor sentiment toward the country."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "International Finance"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-02-06-adani-saga-enters-third-week-as-officials-jump-in-to-calm-nerves/"
published: "2023-02-06T05:59:59"
lang: "en-ZA"
word_count: 692
---

# Adani saga enters third week as officials jump in to calm nerves

> Indian policy makers and regulators stepped in over the weekend to calm frayed nerves over concerns the turmoil surrounding billionaire Gautam Adani’s conglomerate would spill over into the local economy and affect global investor sentiment toward the country.

By Bloomberg · Published 6 February 2023, 07:59 SAST

## Key points
- India's business sector is facing a turbulent period with allegations of corporate wrongdoing against the Adani Group. Prime Minister Modi has yet to comment publicly, but Finance and Trade Ministers have reassured the public that Indian regulators are competent to deal with the fallout, while Asia's wealthiest financier Uday Kotak has said he does not see systemic risks to India’s financial system from “recent events”. Despite this, market value of Adani’s empire has slumped by almost half and small investors are demanding answers. Bankers and industrialists shared their view on the impact on India, urging for stronger underwriting capacity building in order to finance large corporates. The rout in company shares cost India its place among the world’s five biggest stock markets and foreigners have pulled out $3.8-billion from the nation’s equities in 2023. New Delhi is rushing to limit the blow as S&P Global Ratings cut its outlook on Adani entities due to investor concerns about governance disclosures. Investors are now bracing for further volatility as Adani Enterprises pull their record share sale and shelve their first-ever bond plan.
- Prime Minister Narendra Modi has yet to comment publicly on the Adani Group saga, but Indian regulators are independent and competent to deal with the fallout.
- The market value of Adani’s empire has slumped by almost half since a damning report was released by US-based short-seller Hindenburg Research.
- Billionaire businessman Anand Mahindra said “never, ever bet against India” amid questions if current challenges in the business sector will trip the nation’s ambitions to be a global economic force.
- S&P Global Ratings cut its outlook on Adani Ports and SEZ and Adani Electricity Mumbai to negative, citing risks that investor concerns about the group’s governance disclosures may be larger than what is currently factored into ratings. BM/DM

## Content

While Prime Minister Narendra Modi has yet to comment publicly on the saga, officials from his administration said Indian regulators were independent and competent to deal with the fallout. The Securities and Exchange Board of India said it was committed to ensure market integrity. The central bank has assured that banks are within limits on their exposure to the Adani group.

The market value of Adani’s empire has slumped by almost half since the release of a scathing report by US-based short-seller Hindenburg Research on 24 January, accusing it of stock manipulation and accounting fraud. The group has repeatedly denied Hindenburg’s allegations of corporate wrongdoing and threatened legal action.

The tumult has become a national issue, with lawmakers disrupting parliament to demand answers as Adani’s interests often intertwine with India’s growth plans. The main opposition party [ramped up](https://www.bloomberg.com/news/articles/2023-02-05/india-opposition-attacks-modi-on-silence-over-adani-allegations) the pressure on Modi over his silence and planned a nationwide protest on Monday to highlight the risk to small investors.

Most Adani Group dollar bonds rose Monday, with Adani Green Energy Ltd.’s 2024 $750-million note leading the advance, climbing 1.2 cents on the dollar to 72.4 cents as of 10.02am in Hong Kong. Moves on Monday add to gains last week for several of the group’s debt securities, but prices for the notes are still down by about 8 cents to 23 cents on the dollar since Hindenburg Research’s initial report.

Bankers and industrialists also shared their view on the impact on India. Asia’s wealthiest financier Uday Kotak said while he doesn’t see systemic risks to India’s financial system from “recent events”, the country’s large corporates rely on global sources for debt and equity financing, and local underwriting and capacity building needs to improve.

Billionaire businessman Anand Mahindra said “never, ever bet against India” amid questions if current challenges in the business sector will trip the nation’s ambitions to be a global economic force.

I do not see systemic risk to Indian financial system from recent events. However,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.

— Uday Kotak (@udaykotak) [February 5, 2023](https://twitter.com/udaykotak/status/1622154269247045633?ref_src=twsrc%5Etfw)

As the saga enters its third week, investors are bracing for further volatility and the focus is increasingly turning to how Adani Group will manage to finance its debt obligations.

The rout in company shares has [cost](https://www.bloomberg.com/news/articles/2023-01-31/adani-stock-rout-costs-india-spot-in-world-s-top-five-markets) India its place among the world’s five biggest stock markets, while the rupee is the worst performing emerging Asian currency this year. Foreigners have pulled out $3.8-billion from the nation’s equities in 2023, the most among emerging Asian markets.

New Delhi is rushing to limit the blow.

Indian regulators “will do their job” in dealing with the allegations against the Adani Group, Finance Minister Nirmala Sitharaman said on Saturday. The recent market turbulence won’t affect the nation’s economic fundamentals, she said. Trade Minister Piyush Goyal echoed similar sentiments, saying Indian financial markets were among the most-respected and well-regulated in the world.

Global media is speculating whether current challenges in the business sector will trip India’s ambitions to be a global economic force. I’ve lived long enough to see us face earthquakes, droughts, recessions, wars, terror attacks. All I will say is: never, ever bet against India

— anand mahindra (@anandmahindra) [February 4, 2023](https://twitter.com/anandmahindra/status/1621721692082147333?ref_src=twsrc%5Etfw)

Concerns over how the Adani Group will manage its various debt obligations have increased after Adani Enterprises pulled the plug on a record $2.5-billion follow-on share sale, citing the need to protect its investors’ interests.

It has also [shelved](https://www.bloomberg.com/news/articles/2023-02-04/adani-flagship-shelves-122-million-bond-plan-after-market-rout) a plan to raise as much as 10 billion rupees (R2.133-billion) via its first-ever public sale of bonds, Bloomberg News reported on Saturday, citing people familiar with the matter.

S&P Global Ratings cut its outlook on Adani Ports and SEZ and Adani Electricity Mumbai to negative. “There is a risk that investor concerns about the group’s governance disclosures are larger than what we have currently factored into ratings,” the ratings company said in a statement.

There are also risks that new investigations and negative market sentiment may lead to increased cost of capital and reduced funding access for rated entities, it said. **BM/DM**