Hindenburg Research's report has hit stocks of firms such as Ebix hard in the past, and even triggered an investigation leading to the conviction of Nikola's founder Trevor Milton. After shining on a global stage after his meteoric rise as India's top tycoon in less than a decade, Gautam Adani had to pull back his FPO following a loss of face. Following reports of a regulatory investigation into the offer, Adani has reportedly lost confidence of lenders such as Citigroup and Credit Suisse.
RBI looking at exposure for banks
As the Reserve Bank of India has sought details on exposure of banks to the Adani Group, Citigroup has rejected its securities as collateral for loans. The report by Hindenburg, which has eroded 43 per cent from Adani's value, had also prompted similar apprehension from Credit Suisse. Following a crash in stock prices of Adani Group firms, Citigroup's wealth arm has removed lending value from its securities.
What does this mean?
Now clients who had provided Adani securities as collateral, will have to provide cash or other assets, or else the securities will be liquidated. The reports about Credit Suisse and Citigroup, come shortly after Adani's bonds dropped to distressed levels in the US markets. An abrupt withdrawal of the FPO reportedly under scrutiny by the Securities and Exchange Board of India, has only scared off investors further from Adani.
(To receive our E-paper on WhatsApp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)