Hit by Hindenburg Researche's allegations of fraud, and reportedly a probe by the Securities and Exchanges Board of India (SEBI), the Adani Group cancelled its follow on share sale to insulate investors from volatility. As its group stocks have tanked as much as 75 per cent, wiping off more than $100 billion from market value, questions are being asked about risks to state-owned entities. Amid speculation about the Adani stock freefall's impact on State Bank of India and Life Insurance Corporation, India's Finance Minister Nirmala Sitharaman has said that their exposure to Adani is within permissible limits.
She also added that both SBI and LIC are still over profit, even though the Adani Group's stocks are going downhill. Echoing the minister, the Finance Secretary has clarified that the exposure of both state-owned giants to the conglomerate is negligible.
Speaking to NDTV, recently acquired by the Adani Group, the official clarified that SBI and LIC's exposure to the firm wasn't high enough to cause concern. He assured depositors and policy holders by stating that the decline of a single company won't affect institutions of the country. LIC has invested more than Rs 32,000 crore in the port to power behemoth, which has lost over Rs 9 lakh crore in market value in a week, while SBI has given more than Rs 21,000 crore in loans to it.
India's opposition parties used the exposure of these institutions to Adani as basis for demanding a probe into allegations against it. LIC on the other hand said that the Adani debt securities it has are rated AA, while Citigroup and Credit Suisse have reportedly stopped accepting the securities as a collateral for loans.
