India

Indian Protesters Say Modi Favoured Adani as Losses Top $110bn

The Adani Group's market meltdown led to this protests in Delhi and other cities by Congress party supporters. Photo: Reuters

The Adani group crisis sparked protests in India on Monday with members of the opposition party detained by police and parliament suspended.

Hundreds of members of the Congress party gathered to protest across the country, including outside several offices of the state-owned Life Insurance Corporation (LIC) and State Bank of India (SBI), both of which have exposure to Adani group companies.

The crisis was triggered by a scathing report by Hindenburg Research two weeks ago that accused the Adani group of stock manipulation, unsustainable debt and misuse of opaque tax havens.

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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 a dramatic plunge in its shares.

Adani shares continued their freefall, with the conglomerate’s cumulative market value loss topping $110 billion.

Delhi disrupted

In New Delhi’s Jantar Mantar, a Mughal-era observatory that doubles up as a protest site for all causes, protesters held up banners and shouted slogans against Adani group’s billionaire founder Gautam Adani. Some broke through barricades, forcing the police to detain them.

Some protesters burnt a suitcase with an SBI logo on it, while both houses of India’s parliament were adjourned on Monday, the third consecutive day, amid sloganeering and demands for the launch of a formal inquiry.

In the brutal fallout of Hindenburg’s report, Adani group flagship company Adani Enterprises Ltd was forced to abandon a $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 rich list rankings.

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 favouring Adani.

Financial woes

The stock market rout triggered a series of credit ratings 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 the country’s financial markets remain stable and continue to function in a transparent and efficient manner.

Shares of Adani Enterprises sank 9.6% on Monday, taking its market capitalisation losses to nearly $28 billion since the release of the Hindenburg report. Adani Transmission dropped 10%, while Adani Green Energy, Adani Total Gas, Adani Power, and Adani Wilmar all fell by about 5%.