Editor's Pick: Adani Group rout hits LIC, banking stocks

The benchmark S&P BSE Sensex slid 1.5% on Friday, dragged down by banking stocks on investor fears that a short-seller triggered rout in Adani Group stocks could impact lenders with a substantial exposure to the ports-to-commodities conglomerate. The Sensex fell 874.16 points to 59,330.90, with State Bank of India leading the losses (5.03%), ICICI Bank (4.41%), Indus Ind Bank (3.43%), Axis Bank (2.07%) and Kotak Mahindra Bank (2.03%). The NSE Nifty-50 index too declined 287.60 points, 1.6%, to 17,604.35. Several Adani Group stocks hit the 20% lower circuit, while flagship Adani Enterprises, which opened a ₹20,000 crore follow-on public offer on Friday, slumped 18.5% to ₹2,762.15 on the BSE. Against an offer of 4.55 crore shares, only 4.7 lakh were subscribed, according to information available from the BSE. LIC, which some media reports have said had an exposure of about ₹70,000 crore to the Adani Group, also bore the brunt with the stock sliding 3.45%. “Despite the optimistic results announced by the blue chips, this week’s market sentiment suddenly got dampened by the unfavourable research report on Asia’s richest promoter Group [Adani] companies,” said Vinod Nair, Head of Research at Geojit Financial Services. “The same is… affecting banking stocks,” he added. The Congress has demanded a “serious investigation” by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) into a report by the U.S.-based short-seller Hindenburg Research that accused the Adani Group of “brazen stock manipulation and accounting fraud,” charges the Adani Group said were “malicious” and timed to “ruin the public listing of its shares.” Jairam Ramesh, Congress general secretary in charge of communication, said in a statement that exposure of financial institutions such as LIC and SBI to the Adani Group would have implications for the country’s financial stability and crores of depositors “whose savings are stewarded by these pillars of the financial system.” Reuters, citing sources aware of the matter, reported that SEBI had increased scrutiny of deals by the Adani Group over the past year and will study the Hindenburg report to add to its own ongoing initial investigation into the group’s foreign portfolio investors. Brokerage houses CLSA and Jefferies said Indian banks’ exposure to the Adani Group is within manageable limits – while the consolidated debt of five Adani Group firms are pegged at ₹2.1 trillion, Indian banks have exposure to less than 40% of the total group debt. With the spotlight on India’s financial system and the probe on the allegations into a group which has diverse interests from ports to airports, cement to green energy, this story becomes important. Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor’s Pick and more. Click here. The Hindu’s Editorials Founding ideals: On President Murmu’s first Republic Day address to the nation Great expectations: On Nirmala Sitharaman’s pre-poll budget The Hindu’s Daily News Quiz Which research firm recently raised concern about the Adani Group’s “substantial debts”? Citigroup Goldman Sachs Hindenburg JP Morgan To know the answer and to play the full quiz, click here. [logo] Editor's Pick 28 JANUARY 2023 [The Hindu logo] In the Editor's Pick newsletter, The Hindu explains why a story was important enough to be carried on the front page of today's edition of our newspaper. [Arrow]( [Open in browser]( [Mail icon]( [More newsletters]( Adani Group rout hits LIC, banking stocks The benchmark S&P BSE Sensex slid 1.5% on Friday, dragged down by banking stocks on investor fears that a short-seller [triggered rout in Adani Group stocks]( could impact lenders with a substantial exposure to the ports-to-commodities conglomerate. The Sensex fell 874.16 points to 59,330.90, with State Bank of India leading the losses (5.03%), ICICI Bank (4.41%), Indus Ind Bank (3.43%), Axis Bank (2.07%) and Kotak Mahindra Bank (2.03%). The NSE Nifty-50 index too declined 287.60 points, 1.6%, to 17,604.35. Several Adani Group stocks hit the 20% lower circuit, while flagship Adani Enterprises, which opened a ₹20,000 crore follow-on public offer on Friday, slumped 18.5% to ₹2,762.15 on the BSE. Against an offer of 4.55 crore shares, only 4.7 lakh were subscribed, according to information available from the BSE. LIC, which some media reports have said had an exposure of about ₹70,000 crore to the Adani Group, also bore the brunt with the stock sliding 3.45%. “Despite the optimistic results announced by the blue chips, this week’s market sentiment suddenly got dampened by the unfavourable research report on Asia’s richest promoter Group [Adani] companies,” said Vinod Nair, Head of Research at Geojit Financial Services. “The same is… affecting banking stocks,” he added. The Congress has [demanded a “serious investigation”]( by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) into a report by the U.S.-based short-seller Hindenburg Research that accused the Adani Group of “brazen stock manipulation and accounting fraud,” charges the Adani Group said were “malicious” and timed to “ruin the public listing of its shares.” Jairam Ramesh, Congress general secretary in charge of communication, said in a statement that exposure of financial institutions such as LIC and SBI to the Adani Group would have implications for the country’s financial stability and crores of depositors “whose savings are stewarded by these pillars of the financial system.” Reuters, citing sources aware of the matter, reported that SEBI had[increased scrutiny of deals by the Adani Group]( over the past year and will study [the Hindenburg reportÂ]( add to its own ongoing initial investigation into the group’s foreign portfolio investors. Brokerage houses CLSA and Jefferies said [Indian banks’ exposure to the Adani Group]( within manageable limits – while the consolidated debt of five Adani Group firms are pegged at ₹2.1 trillion, Indian banks have exposure to less than 40% of the total group debt. With the spotlight on India’s financial system and the probe on the allegations into a group which has diverse interests from ports to airports, cement to green energy, this story becomes important.  Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor’s Pick and more. [Click here](. The Hindu’s Editorials [Arrow][Founding ideals: On President Murmu’s first Republic Day address to the nation]( [Arrow][Great expectations: On Nirmala Sitharaman’s pre-poll budget]( The Hindu’s Daily News Quiz Which research firm recently raised concern about the Adani Group’s “substantial debts”? - Citigroup - Goldman Sachs - Hindenburg - JP Morgan To know the answer and to play the full quiz, [click here](. Are you a book lover looking for your next literary adventure? Look no further than “The Hindu On Books” weekly newsletter! We scour the shelves to bring you the best new releases and hidden gems in all genres. With in-depth book reviews and recommendations, you can trust that you will find your next literary love here. Sign up now and discover your next favorite book!" [Subscribe Now!]( [[Palestinian gunman kills 7 in east Jerusalem synagogue attack] Palestinian gunman kills 7 in east Jerusalem synagogue attack]( [[Sukhoi, Mirage fighter jets crash near Madhya Pradesh’s Morena; one pilot killed] Sukhoi, Mirage fighter jets crash near Madhya Pradesh’s Morena; one pilot killed]( [[Japan to drop mask guidance, relax Covid strategy] Japan to drop mask guidance, relax Covid strategy]( [[Kicks, punches and cries of ‘Mom!’: the fatal Memphis police beating] Kicks, punches and cries of ‘Mom!’: the fatal Memphis police beating]( Copyright @ 2022, THG PUBLISHING PVT LTD. If you are facing any trouble in viewing this newsletter, please [try here]( If you do not wish to receive such emails [go here](