Art school teacher Sagar Kambli gives final touches to a painting of Indian businessman Gautam Adani (L) highlighting the ongoing crisis of the Adani group in Mumbai on February 3, 2023.
Indranil Mukherjee | Afp | Getty Images
Shares of most Adani Group companies fell further on Monday, continuing to drop as a feud between the conglomerate and short-seller firm Hindenburg deepened.
Adani Enterprises lost 4%, and Adani Transmission fell 10% in Mumbai’s morning session. Adani Green Energy, Adani Power and Adani Total Gas fell 5% each. Adani Port and Special Economic Zone bucked the trend and traded 2% higher, but they remained volatile.
Bernstein warned there will be more pain ahead in its latest “India Strategy” report.
“There will be more volatility in India this year; hence the market is prone to a correction,” analyst Venugopal Garre wrote in a Monday note. “The best way to pick up such transactions is to look for arbitrages in implied growth.”
Goldman Sachs echoed the likes of Nomura and HSBC in saying that the latest developments are unlikely to result in a spillover effect for the wider Indian stock market.
“We believe credit concerns are likely to be idiosyncratic in nature and are less likely to have broader contagion or systemic issues for the India offshore credit market,” Goldman Sachs analysts Kenneth Ho and Chakki Ting said in a Friday note.
They noted uncertainties surrounding Adani, saying its outstanding U.S. dollar bonds may hurt investor sentiment, but those concerns will be “unlikely to have a broader contagion impact.”
Adani Group’s total gross debt reached 2.2 trillion Indian rupees ($26.8 billion) as of end-March in 2022, according to the latest statement it’s released in response to Hindenburg accusations of stock manipulation and fraud.
The group is likely to scrap plans to raise roughly $500 million in overseas bond sales and will “explore other financing options” instead, India’s Economic Times reported.
Meanwhile, the Bloomberg Billionaires…
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