The government Saturday again stepped in to calm the markets hit by the Adani sell-off stating that the macro-economic fundamentals and the country’s image have not been affected. And that the “independent” regulators will do their job on the crash in stocks of Adani group companies after US-based Hindenburg Research raised allegations of “brazen stock manipulation and fraud” against the group. Union Finance Minister Nirmala Sitharaman said here that India’s foreign exchange reserves have gone up by $8 billion in the last two days. “So our macro-economic fundamentals or our economy’s image. none of which has been affected. FPOs come in and FIIs come and get out… these fluctuations are there in every market,” Sitharaman said, when asked about the impact of the Adani episode. “The fact that we have had $8 billion come in the last few days… the perception about India’s inherent strengths is intact,” Sitharaman said, a day after she said that investor confidence would endure in the market. Addressing a press conference Saturday as part of the post-budget interactions organised by the Finance Ministry, Sitharaman said: “Regulators will do their job. The RBI has commented already. Prior to that, banks and LIC have come out and said what their level of exposure (to Adani Group) is. The regulators are independent of the government. They are left to themselves to do what is appropriate.And, actually, for keeping the market regulated well in prime condition, the SEBI is the authority.” Meanwhile, the Securities and Exchange Board of India, too, issued a statement on Saturday underlining its surveillance measures. “During the past week, unusual price movement in the stocks of a business conglomerate has been observed. As part of its mandate, Sebi seeks to maintain orderly and efficient functioning of the market and has put in place a set of well defined, publicly available surveillance measures to address excessive volatility in specific stocks,” the market regulator said. These come in the wake of the Opposition’s demand for a probe either by a Joint Parliamentary Committee (JPC) or one headed by the Supreme Court or monitored by the Chief Justice of India, into allegations of fraud and stock manipulation against the Adani Group. The flagship Adani Enterprises (AEL) came under huge selling pressure and its stock fell by 54 per cent after the Hindenburg report was released January 24. Nine other listed Adani stocks crashed by up to 50 per cent since then and even spurred an intra-day fall in the Sensex on February 1 when the Budget was announced. The group had to call off AEL’s follow-on public offer (FPO) a day after it managed to get full subscription to the issue, following interest from non-institutional investors and family offices of large corporations. Amid concerns over the impact of the crisis at Adani Group on the banking sector, the Reserve Bank of India (RBI) on Friday said the sector remains resilient and stable. Without naming any large corporate, the RBI said it remains vigilant and continues to monitor the stability of the country’s banking sector. After calling off the FPO, Gautam Adani last week said that he would refund investors’ money. The decline in share prices of the Adani group has led to significant erosion in his net worth, pushing him 3rd spot to 17th on the Forbes global billionaires list February 3, with a net worth of $61.7 billion. Earlier, while talking to industry bodies in a post-budget interaction in Mumbai, Sitharaman said the government’s main focus is to sustain growth and recovery. In the Union Budget 2023-24, the Finance Minister had said in the current year the country’s economic growth is estimated to be at 7 per cent, which is the highest among all the major economies. “The recovery momentum should not be lost and, therefore, it was an expressed desire of the Prime Minister that the public capital expenditure should be kept up. So, it has reached double digit – Rs 10 lakh crore,” she said. Speaking on the occasion, Economic Affairs Secretary Ajay Seth said the government is committed to working with the private sector to make sure capex and investment in the economy remains at a high level. Department of Investment and Public Asset Management Tuhin Kanta Pandey said the disinvestment of Shipping Corporation of India is in a fairly advanced stage. For IDBI Bank, the government has received expression of interest (EoI) and it is working with the RBI to take the disinvestment process forward, he added. On Friday, Fitch Ratings said there is no immediate impact on the ratings of Fitch-rated Adani entities and their securities. Moody’s said its ratings for Adani Ports and Special Economic Zone, Adani Green Energy and Adani Transmission, are underpinned by their infrastructure businesses with long-term sales contracts, strong operating cash flows and dominant market position. However, S&P Global Ratings revised the outlook on Adani Ports and SEZ, and Adani Electricity to negative from stable.
