NEW DELHI: The Reserve Bank of India has sought details from local banks about their exposure to Adani Group companies, following a $100 billion wipeout in the cumulative market valuation of the conglomerate since last week.
Government and banking sources, quoted in a report by news agency Reuters, have confirmed the development. The central bank has not given an official statement on the matter yet.
Shares of Adani Group companies continued their downward spiral on the stock market on Thursday, even as the conglomerate’s billionaire owner, Gautam Adani released a video statement to calm investors.
Most listed companies of the group hit their lower circuits, falling 5 per cent and 10 per cent, after the group called off the secondary share sale or FPO of its flagship company, Adani Enterprises.
Adani Enterprises was down over 8 per cent, while Adani Ports and SEZ fell over 3 per cent. All other listed companies – Adani Wilmar, Adani Power, Adani Transmission, Adani Green Energy and Adani Total Gas – hit their lower circuits. NDTV, too, hit its lower circuit in early trade.
Adani-owned Ambuja and ACC were the two companies that managed to reverse the trend, rising in the range of 1-5 per cent.
Adani Group’s disastrous run on the stock market started last week after a US short seller firm, Hindenburg Research, came out with an explosive report on the conglomerate. It raised concerns about the group’s mounting debt and accused it of stock manipulation and irregular use of tax havens, among other things.
While the group released multiple statements and a 413-page response to questions asked by Hindenburg, stocks of its listed companies continued to fall. On Wednesday, the group called off the Rs 20,000 crore secondary share sale of its flagship company, citing extreme stock market volatility.
Meanwhile, the Securities and Exchange Board of India (Sebi) has reportedly started examining the recent crash in Adani Group stocks. The increased scrutiny on the group by regulators in addition to the Hindenburg report could prove to be a double whammy for the company in the near-term.