Adani losing lock, stock and barrel

 By Venkatesh Raghavan

Mumbai/New Delhi: While the Opposition parties continued to disrupt Parliamentary proceedings over the Adani issue today,  the Adani Group shares witnessed a cumulative steep fall of around USD 110 billion, close to INR 9 lakhs crores over a six-day period before settling to marginal fluctuations centred on its new base values.

At the time of going to press, it was learnt that the impact of the compiled report had also adversely affected Adani’s bond values indicating that companies that had pledged Adani’s bonds as collateral for acquiring loans have landed in a big mess, having to re-organize the collateral they have pledged.

Market intelligence cautioned new investors against the purchase of Adani stocks, advocating a wait-and-watch strategy till the crisis tides over by the end of the quarter while political turmoil heightened with both houses of Parliament being adjourned after repeated protests and sloganeering.  

For the third straight week, the stocks continued to tumble with the group’s flagship Adani Enterprises losing out by 10%. While the group companies’ results are awaited for the current quarter, market observers predicted that any immediate and significant upward movement in share prices is unlikely. While the group’s losses are currently pegged at USD 118 billion, amounting to more than 50% of the companies’ value, the group continues to live in denial mode on public platforms.  

Three of the group companies including freshly acquired Ambuja Cements, the flagship company Adani Enterprises and Adani Ports have been subject to stringent rules under the Additional Surveillance measure (ASM) by the stock exchanges pan India.

The Securities and Exchange Board of India pitched in with the reassurance that the markets continue to be stable and run in a transparent and efficient manner. On the face of it, the assurances seemed to have little impact on investor sentiments, with more and more of the flagship company Adani Enterprises losing out by 9.5% and Adani Transmissions losing out by 10% owing to selling pressure. Other group companies like Adani Total Gas, Adani Power, Adani Green Energy were trading at a 5% loss it was reported.

Meanwhile, in New Delhi, the police detained and arrested several protestors of the Congress Party before Parliament got adjourned for the third straight working day. Protests were also witnessed at the Jantar Mantar grounds in the city with people carrying banners and shouting slogans against the Adanis. Police detained some of the protesters who attempted to break the barricade.

The Congress Party president, Mallikarjun Kharge, reiterated the Opposition’s demand for a probe to investigate the alleged manipulations either under a Joint Parliamentary Committee or a Supreme Court Judge. He referred to an element of coercion exercised by the higher echelons of the government on public sector undertakings like SBI and LIC.  Interestingly, the PSUs including Bank of Baroda, LIC and SBI in the separate statements they issued clarified that their exposure to Adani stocks was fully covered by cash-generating assets and well within robust limits. The statements were issued to allay fears that opposition leaders had voiced over depositors’ savings in public sector banks coming under threat of risk.

The spate of disastrous turnouts for the capital markets in India was triggered by an American short seller firm, Hindenburg Research which made detailed findings of share price manipulations by the Adani Group on January 24, 2023.

*Senior journalist