India Has 15 Big Energy Companies, Adani Stock Rout Has No Impact, Minister
In New Delhi: R. K. Singh, India’s minister of power and new and renewable energy, on Thursday dispelled concerns about any potential effects of the stock route of Adani group corporations on the development of clean energy.
Mr. Singh’s remarks come as opposition party representatives in both houses of parliament have banded together to call for the suspension of regular business so that the Adani Group’s alleged fraud can be discussed.
Political backlash
The problem resulted in a full washout of the Lok Sabha and Rajya Sabha sessions on Thursday.
In response to a question regarding the issue’s effect on the clean energy sector, Mr. Singh told reporters during a press conference, “I have the most reliable renewable energy capacity in the entire world, which entails that I have at least 15–16 sizable businesses that are on par with major international corporations. We won’t be impacted in any way by it. We have a lot of huge businesses, some of which are among the biggest in the world for renewable energy.”
The crash in the stocks of the companies in the Adani group has also been demanded by the opposition parties.
The LIC link
The Life Insurance Corporation (LIC) and public sector banks’ investments are at risk due to the decline in the value of the Adani Group’s equities.
Since the tiny New York business released a damning study claiming financial and accounting fraud by the ports-to-energy conglomerate, the value of Adani group equities, in which LIC is significantly involved, has dropped by almost USD 100 billion.
Adani’s Take
The Adani Group has denied the accusations, claiming that it abides by all legal and disclosure obligations. It referred to the Hindenburg report as unfounded and made a legal threat against the short seller.
Adani Enterprises made the decision not to proceed with its 20,000 crore follow-on Public Offer (FPO) and will return the cash to investors on Wednesday night. The news was made a day after the FPO’s final day on Tuesday, when it had been fully subscribed.
LIC’s response
Mumbai: Life Insurance Corporation (LIC) reported on Monday that it has exposure to the debt and equity of the Adani group worth 36,474.78 crore, less than 1% of the national insurer’s total investments.
As of September 2022, LIC had approximately 41.66 lakh crore in assets under control.
As of September 2022, LIC had approximately 41.66 lakh crore in assets under control.
The insurer, which is also the largest domestic institutional investor in the nation, made the disclosure as Adani group stocks were falling on the stock exchanges following a report by the short-selling expert firm Hindenburg Research that made a long list of accusations against the Gautam Adani-led company, including fraudulent transactions and share price manipulation. The group has disputed the accusations.
“We currently possess 36,474.78 crores worth of equity and debt in the Adani group firms. As of December 31, 2022, this was 35,917.31 crore. These shares of the group firms were purchased for a total of 30,127 crore over the course of many years, and their market value was 56,142 crore on January 27, 2023 “In a tweet, LIC stated.
The insurer did not, however, reveal its exposure on a company-by-company basis.
All of the Adani debt instruments that LIC claims to own have credit ratings of “AA” or higher, which is in conformity with Irdai investing standards.
The Hindenburg Research research was released two days prior to the January 27 opening of Adani Enterprises’ 20,000 crore Follow on Public Offer (FPO). On January 26, the quota for anchor investors was fully subscribed.
As an anchor investor, LIC contributed around 300 crore to purchase 9,15,748 shares in the present FPO. LIC already owned 4.23 percent of the business.
As anchor investors, 33 institutional investors contributed a total of 5,985 crore to Adani Enterprises’ FPO.
Since the report was issued on January 24, the market capitalization of the listed companies in the Adani group has decreased by more than USD 70 billion.
LIC is examining Adani Group’s denial of the short seller’s complaint
The Adani Group’s response to harsh criticism from a U.S. short-seller was under evaluation, according to India’s Life Insurance Corporation (LIC), which also said on Monday that it would conduct talks with the group’s management soon.
Since Hindenburg Research raised worries about the business house’s debt levels and usage of tax havens early last week, shares of the group of companies, led by Asia’s richest person Gautam Adani, have fallen by roughly $66 billion. Adani claims to have made the required regulatory disclosures and to be in compliance with all local regulations.
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