Ashish Ranjan
Adani’s FPO withdrawal: Finance Minister on Saturday said that the Adani’s FPO withdrawal had no impact on the country’s macroeconomic fundamentals and reputation.Days after Adani Enterprises cancelled its Rs 20,000 crore follow-on public offering (FPO) in response to US-based short seller Hindenburg’s “stock manipulation” allegations, Union Finance Minister Nirmala Sitharaman stated on Saturday that India’s macro fundamentals and image are unaffected and that the country’s perception is “intact”.
Siharaman stated at a press conference in Mumbai, “Our macroeconomic fundamentals and the image of our economy have not been affected in any way. The fact that our foreign exchange reserves have increased by eight billion dollars over the past two days indicates that perceptions of India and its inherent strength remain intact.
“How many times have FPOs not left this country, and how many times has India’s reputation suffered as a result? How many times have FPOs not returned?” she questioned. There are “fluctuations” in every market, according to the minister, but the accretion over the past few days demonstrates that the perception of India and its inherent strengths remain intact.
The Finance Minister stated that regulators will carry out their responsibilities regarding the Adani issue and that the Securities and Exchange Board of India (SEBI) has the resources to ensure market stability. Sitharaman remarked that regulators are independent from the government, and “they’re left to themselves to regulate the market appropriately.”
Meanwhile, Finance Secretary TV Somanathan stood by his characterization of the controversy as a “storm in a teacup” on Saturday, clarifying that he was speaking in macroeconomic terms and in the context of the stability of India’s public financial institutions.
The government stated earlier on Friday that the exposure of banks and insurers to the Adani group was within “permitted limits.” “Both SBI and LIC issued comprehensive statements… Chairman of the Board, Chief Executive Officer, has publicly stated that they are not overexposed… In addition, he stated that we are sitting on profits for the exposure… In an interview with Network18, Union Finance Minister Nirmala Sitharaman stated, “They have stated unequivocally that their exposure is well within permissible limits, and even now, with the valuation falling, they are sitting above profit.”
Sitharaman had stated that the banking industry is currently in a “comfortable” position.
“After overcoming the twin balance sheet issue, the Indian banking sector is currently at a comfortable level. Their NPAs are decreasing to extremely low levels, recoveries are occurring, and their position is very strong, which is reflected in the fact that when they go to raise funds on the market, they are completely at ease,” she added.
Without naming the Adani group, the Reserve Bank of India responded to media reports expressing concern about bank exposures to a “business conglomerate” by asserting that “the banking sector remains resilient and stable” According to the report, banks are also in compliance with the RBI’s Large Exposure Framework regulations.
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Since US-based investor research firm Hindenburg Research last week accused the Gautam Adani-led conglomerate of “brazen stock manipulation and accounting fraud scheme over decades”, seven listed firms of Adani Group have lost approximately half of their market value, or more than $100 billion collectively. However, Adani Group has rejected the criticism and denied any wrongdoing.
Adani, who was formerly the wealthiest Indian in the world, is now ranked 22nd on the Forbes Real-time billionaire list for 2023.
