Even as the Adani Group faces scrutiny over allegations made by Hindenburg Research, Uday Kotak said on Sunday that he sees no systemic risk to the Indian financial system from recent events. However, he said that large Indian corporations are more reliant on global sources for debt and equity financing, which creates challenges and vulnerabilities.
“Time to further strengthen underwriting and capacity building in India,” Kotak said in a tweet.
On January 24, 2023, Hindenburg Research, a US-based research firm, released a report that had several adverse observations about accounting practices, related party transactions, concentrated stock ownership by some foreign investment firms and the movement of the share price of the Adani Group of companies.
Kotak is among the first Indian leaders to suggest structural changes in the wake of Adani’s allegations.
The tranquility of SEBI
On Saturday, the Securities and Exchange Board of India (SEBI) assured participants of the stability of the market. The market regulator said the financial market, represented by Sensex and Nifty, has demonstrated continued stability and continues to operate in a transparent, fair and efficient manner.
This comes even as S&P Global Ratings said on Friday that it revised the rating outlook for Adani Electricity Mumbai and Adani Ports to “negative” from “stable” due to concerns about rising capital costs and reduced access to the foundership. This is the first rating action by a global rating agency after Hindenburg Research published its report.
S&P Dow Jones Indices announced that it would remove Adani Enterprises from its widely used sustainability indices effective February 7.
