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Indian regulators aware of concerns on Adani issue

Three Adani group companies have pledged shares for lenders to the Indian conglomerate’s flagship Adani Enterprises, which pulled a $2.5 billion share sale during a recent market rout

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Indian regulators are aware of concerns regarding the Adani Group conglomerate, the finance minister said on Saturday, responding to comments by the Supreme Court regarding the need for investor protection.

The regulators were experienced and seized of the matter, Nirmala Sitharaman told reporters after meeting the central bank’s directors in New Delhi, the capital.

She declined to elaborate on what the government planned to tell the Supreme Court, however.

Investor interests need to be protected, the court had said on Friday, after hearing two cases about large investor losses following a report by a U.S. short seller on the Adani group.

Shares pledged

Meanwhile, Three Adani group companies have pledged shares for lenders to the Indian conglomerate’s flagship Adani Enterprises, which pulled a $2.5 billion share sale during a recent market rout, the debt trustee firm said.

Adani Ports and Special Economic Zone, Adani Transmission Ltd and Adani Green Energy Ltd pledged shares to SBICAP Trustee Co, the firm said in Friday filings to the Bombay Stock Exchange.

The trustee, a unit of India’s biggest state lender, State Bank of India, said it had pledges for shares worth one per cent of Adani Ports, up from 0.65 per cent, for 0.55 per cent of Adani Transmission, up from 0.44 per cent, and for 1.06 per cent of Adani Green, up from 0.68 per cent.

SBICAP Trustee said it had received the pledges in its capacity as “security trustee” of the lenders of Adani Enterprises.

Group companies controlled by billionaire Gautam Adani have lost more than $100 billion in market value since January 24, when a US short seller issued a scathing report on the apples-to-airports conglomerate.

Hindenburg Research accused the group of stock manipulation and improper use of offshore tax havens. The group has rejected the firm’s findings and denied any wrongdoing.

India’s market regulator, the Securities and Exchange Board of India, is investigating the Adani group’s links to some of the investors in the conglomerate’s aborted share sale, sources told Reuters on Friday.

Fitch estimates that loans to all Adani group entities account for 0.8 per cent to 1.2 per cent of total lending by Indian banks rated by the agency.

State Bank of India’s exposure to the group was 0.9 per cent of its loan book, or around 270 billion Indian rupees ($3.3 billion), chairman Dinesh Kumar Khara has said.

The Adani exposure of Indian banks is not enough to affect their credit profiles, two global rating agencies have said. — Reuters

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