Adani sell-off extends; India's opposition lawmakers launch protests
Members of the National Students' Union of India (NSUI), the student wing of India's main opposition Congress party, react as police are detaining them during a protest demanding a probe by a Joint Parliamentary Committee (JPC) into Adani Group, in New Delhi, India, February 6.
Lawmakers of India's main opposition party kicked off planned protests at some state-run companies on Monday over the crisis at Adani group, whose seven listed firms saw another sell-off that drove their market loss to US$112 billion in under two weeks.
Members of the Congress party plan to protest outside several offices of state-owned insurer Life Insurance Corporation (LIC) and State Bank of India (SBI), both of which have exposure to Adani group companies.
At one of the protest sites in Mumbai, people held up banners with the words "Save SBI", television footage showed.
The crisis was triggered by US-based short-seller Hindenburg Research's January 24 report that accused the Adani group of stock manipulation, unsustainable debt and use of tax havens.
The Adani group, one of India's top conglomerates, has rejected the criticism and denied wrongdoing in detailed rebuttals, but that has failed to arrest the unabated fall in its shares.
In the brutal fallout of Hindenburg's report, Adani group flagship company Adani Enterprises Ltd was forced to abandon a US$2.5 billion share sale last week, and group chairman Gautam Adani lost his crown as Asia's richest person and slipped down the global rankings of the wealthy.
Gautam Adani and India's Prime Minister Narendra Modi are from the same state. Adani has denied allegations by Modi's opponents that he had benefited from their close ties, and Modi's government has denied allegations of favoring Adani.
As the Adani shares spiralled lower and cast a pall over Indian markets last week, lawmakers disrupted parliament and demanded an inquiry.
Activists of the youth wing of India's main opposition Congress party burn a suitcase during a protest against what they say are investments by Life Insurance Corporation (LIC) and State Bank of India (SBI) in Adani Group, in New Delhi, India, February 6.
Credit Rating Warnings
The stock market rout triggered a series of credit rating warnings on Friday with Moody's saying the group may struggle to raise capital, and S&P cutting its outlook on two group companies.
Even attempts by regulators and the government to calm spooked investors do not appear to be working.
The Reserve Bank of India said on Friday the country's banking system remains resilient and stable. India's market regulator said on Saturday that the country's financial markets remain stable and function transparently and efficiently.
SBI said on Friday it was not concerned about the exposure to the Adani group, but further financing to its projects would be "evaluated on its own merit".
India's divestment secretary Tuhin Kanta Pandey told Reuters on Friday that LIC shareholders and customers should not be concerned about its exposure to the Adani group.
LIC has a 4.23 percent equity stake in the flagship Adani Enterprises, while its other exposures include a 9.14 percent stake in Adani Ports and Special Economic Zone.
Shares of Adani Enterprises sank 9.6 percent on Monday, taking its market capitalisation losses to nearly US$28 billion since the release of the short-sellers report.
Adani Transmission Ltd dropped 10 percent, while Adani Green Energy Ltd, Adani Total Gas Ltd, Adani Power, and Adani Wilmar fell roughly 5 percent.
Adani Ports was the only stock to buck the trend, rising 1.2 percent.
