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Among the Adani Group shares, LIC, SBI, which have seen a major fall in the stock markets in the wake of the Hindenburg thesis. Public Sector Undertakings have invested more. Due to this, the question has arisen whether the life savings of crores of people in those companies are at risk.
It’s been a troubled time for Indian billionaire Gautam Adhani, who has climbed the ranks of the world’s richest people in recent years, reaching second place on the Forbes list. A study published by the US-based Hindenburg Research Institute on Wednesday has shaken the Adani Group.
Hindenburg to challenge Adani
The Hindenburg Report accused the Adani Group of stock market manipulation and accounting fraud.
The Adani Group has also decided to take legal action, saying that the Hindenburg report is malicious.
However, the Hindenburg Research Institute has given a challenging response saying, “Adani Group has not responded to any of the allegations made by us in the report. We have the necessary documents to prove each and every accusation made by us. If Adani Group wants, it can even file a case in the American courts. We are ready to face it.”
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Anderson, founder of the Hindenburg Research Company.
Adani shares fall in the stock market
After the publication of the Hindenburg report, the Adani Group’s share price has seen a sharp fall in the stock market on Wednesday and Friday. Shares of 10 companies under the group have fallen sharply.
In particular, shares of Adani Transmission, Adani Total Gas and Adani Green Energy all fell below 20 percent. Shares of Adani Group parent Adani Enterprises tumbled as much as 18.5 percent.
After the publication of the Hindenburg report, the value of 7 major companies in the Adani Group has fallen by around Rs 3.92 lakh crore. Adani Group owns one fifth of the total i.e. around Rs. 4.2 lakh crore has lost market capitalization value.
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A regression in the ranks of the world’s richest people
The collapse of the Adani Group has hit the net worth of its chairman Gautam Adani. His net worth has fallen to Rs 7.87 lakh crore.
In just two days, his assets have reduced by Rs 1.85 lakh crore. Due to this, Gautam Adhani has been relegated to the seventh place in the list of the world’s richest people.
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Issue of additional shares by Adani Enterprises
Adani Enterprises has gone ahead with its planned IPO to raise additional capital of Rs 20,000 crore despite the stock market’s setback after the Hindenburg report. Adani Group’s bloodshed in the stock market following the Hindenburg report echoed here as well.
The day did not go as Adani Enterprises had hoped. Mumbai Stock Exchange website data showed that only one per cent of shares were subscribed on Friday, the first day, as investors hesitated due to stock market conditions. While the company has issued 4.55 crore shares, only about 4.7 lakh shares have received reservations.
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Adani Group includes LIC, SBI. Reinvestment
However, these stock market events in Adani Enterprises LIC, SBI. Labor Pension Fund, SBI PSUs such as insurance companies have not had any impact on investment.
LIC 300 crore to the company, SBI Labor Pension Fund Rs.100 crore, SBI The insurance company has invested Rs.125 crore.
As Adani Group shares fall, LIC. The company lost Rs 16,580 crore in two days. That is, LIC The share value of Adani’s holdings has fallen to such an extent.
LIC, SBI among Adani Group which is falling in the stock market. The question has arisen whether it is right that these public sector companies have reinvested. Due to this, there is a fear that the life savings of crores of people in these two companies are at risk.
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Risk to country’s financial stability – Congress
“Both LIC and SBI, major players in the Indian financial market, have invested heavily in the Adani Group. Thus, a crisis for the Adani Group has the potential to impact the overall financial stability of the country and the lives of crores of people who have invested in those PSUs. ,” says Congress General Secretary Jairam Ramesh.
“There is no need for a political party to comment on a report on an individual or a company. But the Adani Group is no ordinary company. It is owned by Gautam Adani, who is known to be close to Prime Minister Narendra Modi when he was Gujarat Chief Minister. Hence, stock market regulator SEBI has asked the questions raised by the Hindenburg report. should be investigated,” the Congress asserted.
“What happens to people’s savings in LIC, SBI?”
Senior Communist Party leader Sitaram Yechury feared, “If the allegations made by the Hindenburg paper are true, it will ruin the lives of crores of people who have invested their life savings in LIC and SBI.”
“Prime Minister Modi must give an explanation to the country. A thorough investigation is necessary,” said T. Raja, General Secretary of the Communist Party of India.
SBI What does the bank say?
SBI told Reuters about its investments in Adani Group. Chairman Dinesh Kumar Kara has explained. “SBI’s investment in Adani Group is nothing to worry about. We have invested less than what RBI has allowed, so we don’t have any concerns at this stage.” He said that.
He further said, “SBI Bank has not made any investment in the Adani Group in the recent past. If there is any request for investment from the Adani Group in the future, we will approach it with discretion.”
By reinvesting Rs 300 crore in Adani Enterprises, LICO has tacitly signaled its response regardless of the current events in the stock market, say stock market experts.
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What do stock market experts say?
In this regard, the stock market expert Soma. Speaking to Valliappan, he said, “LIC and SBI are big companies and in comparison, their investment in Adani Group is small. Also, I don’t think they could have invested in Adani Group more than what RBI has allowed.
LIC, SBI are affected by the current events in the stock market. Although these PSUs may incur losses, I think it will not affect them to a great extent. Therefore, LIC, SBI There is no need to fear about the stability of the companies,” he said.
Stock market expert Soma Valliappan
What does the future hold for Adani Group?
“The main allegation of the Hindenburg report seems to be that the Adani Group overestimated its market capitalization value and artificially inflated its value. Overvaluation of the company is not new. If the Hindenburg report had said that the Adani Group was involved in illegal activities like bribery, it would have created a big problem.
No matter how true the Hindenburg thesis is, there is a reluctance among large investors to invest in the Adani Group as the cloud of doubt surrounds it at present. Small investors should consider it a risk and stay away. I don’t know if they will do that,” says Valliappan.
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And while he was speaking, “It is more important than whether the Hindenburg report is true or not, what action SEBI or Reserve Bank of India is going to take on it. When will the clouds of doubt raised by the report be removed or confirmed? What will be SEBI or RBI’s action?” Adani Group said. “The future of its shares will be determined,” he said.
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