Current Scenario:
After eight consecutive lower circuits of 5%, Adani Wilmar’s shares have emerged to end at an upper circuit of 5%. In the last 15 trading days, the stock has only risen three times.
Adani Enterprises shares finished 15% higher on Tuesday after being locked in a 20% upper circuit earlier in the day.
According to experts, the Adani group is unlikely to face bond repayment issues.
In the coming years, the group expects total redemptions of Rs 90,000 crore, which includes overseas bonds and commercial papers.
According to JP Morgan, Adani Group is eligible for its key indexes.
JP Morgan’s latest note comes four days after Fitch stated that the Hindenburg report has no immediate impact on the credit ratings of Adani group entities and securities.
The group has a notional value of $7.7 billion in JPMorgan’s CEMBI and JACI indexes, according to the note.
Banks’ exposure to the Adani group is “insufficient,” and they face limited risk, according to Fitch.
Fitch Ratings said on Tuesday that Indian banks’ exposure to the Adani group is “insufficient in and of itself” to pose a significant risk to their credit profiles. After a damning report alleging financial and accounting fraud by the ports-to-energy conglomerate, US short seller Hindenburg Research issued a stock rout and raised questions about Adani Group. Adani Group has denied all of the allegations and has threatened to sue Hindenburg.”
“We believe loans to all Adani group entities account for 0.8-1.2 percent of total lending for Fitch-rated Indian banks, or 7-13 percent of total equity,” the rating agency stated. “Even in a distress scenario, it is unlikely that all of this exposure would be written down, as much of it is tied to performing projects. Loans involving ongoing construction projects and those at the corporate level may be more vulnerable. Even if all exposures were fully provisioned for, we do not expect it to have an impact on banks’ viability ratings because banks have enough headroom at their current rating levels.” Fitch believes banks may have unreported non-funded asset exposure, such as commitments or holdings of Adani group bonds or equity, particularly as collateral.
“However, we anticipate that any such holdings will be minor in comparison to loan exposures, and we do not believe they will be material for Fitch-rated Indian banks.” State banks may face pressure to provide refinancing for Adani entities if foreign banks reduce their exposure or investor appetite for the group’s debt dwindles in global markets, according to the agency. “This could affect our assessment of the risk appetite of such banks, particularly if not matched with the commensurate building of capital buffers. “However, such a scenario would underpin state-owned banks’ quasi-policy role and reinforce our sovereign support expectations,” it said.
Congress Raises the Bar on the Hindenburg Research Report
The Congress has begun the week by raising the stakes in the Hindenburg research report, holding nationwide protests at SEBI and LIC offices. Congress workers staged massive protests from Jammu to Chennai, Delhi to Thiruvananthapuram, demanding answers from the government. Another washout day in Parliament as the opposition refused to allow the house to function, reiterating their demand for a discussion on Adani and nothing else. Opposition leaders also gathered outside Parliament, shouting anti-government slogans. The opposition continues to press the government for answers on the Adani disaster, and the stage is set for another washout week in Parliament.
The opposition wants the JPC to look into the Adani allegations.
The Adani storm reached Parliament this week, with the Opposition banding together to demand an investigation into the allegations of fraud and stock manipulation by a Joint Parliamentary Committee (JPC) headed by the Supreme Court or monitored by the Chief Justice of India.
The research firm, which has short positions in Adani companies through US-traded bonds and non-Indian-traded derivative instruments, said key listed companies in the group had “substantial debt” which has put the entire group on a “precarious financial footing”.
The government responds
Union Finance Minister Nirmala Sitharaman stated on Friday that LIC and SBI were not “over-exposed” (to Adani Group shares) and that “investors’ confidence” in the market would continue.
The Union Finance Minister has also stated that regulators are free of any influence and will conduct process due diligence to define standard operating procedures to deal with the issue at hand. The government of India has no say in the task of regulators.
The opposition is creating false narratives with the 2024 general elections in mind. Today in parliament, Rahul Gandhi displayed a photograph of Prime Minister Modi and Gautam Adani, requesting that the Prime Minister specify how many times they travelled together for different countries.
You should be aware that the opposition already has a slew of grievances against the government. They are unable to build compelling cases for Modi’s government in India. As a result, they’re looking for something to ride on general elections.
Initially, they spread rumours that public money was being looted through their markets, common people’s hearts, and money invested in the market through LIC and SBI.
Today, most of the leaders began the debate by stating that they do not believe what a Wall Street short sailor has to say: they are saying that the Hindenburg report is not to be believed or that they do not have faith in it.
When the RBI, LIC, and SBI have already clarified that the loan amount given to Adanis is not at risk due to their cash flow and market asset value, the loan amount given to them is not at risk. The opposition has already reversed its position on the LIC and SBI rumours. They appear to be oblivious to the issues that should be raised against the government. What they want to emphasized.
If showing a photograph is a narrative of crony capitalism, then there are numerous; the entire Internet is filled with photographs of Gautam Adani, Robert Wadhra, Ashok Gehlot, and other political leaders.
In the midst of targeting Adani’s and Modi’s relationship, Rahul Gandhi did self-goal; Can be sensed unknowingly batting for another corporate called GVK towards contract allotment of Mumbai airport.
In a nutshell, Rahul Congress intended to target Modi’s BJP. However, they have no idea how to Corden off the government.
