NEW DELHI, Feb 3 ― Shares of India's Adani Group companies fell sharply on Friday as ripples from a market rout disrupted parliament for a second day, fanning fears of systemic risk after a critical research report by a US short-seller.
Lawmakers have called for a wider investigation of the matter, and sources have told Reuters the central bank has asked lenders for details of exposure to the group. The stock's new low took its losses to nearly US$33.6 billion since last week, for a decline of 70 per cent. On Thursday, S&P Dow Jones Indices said it would drop the Adani Enterprises flagship from widely used sustainability indices on February 7, which would blunt their appeal for environment-conscious investors.
In its report, Hindenburg said key listed Adani companies had “substantial debt” while shares in seven listed firms had a downside of 85 per cent due to what it called sky-high valuations. It also alleged stock manipulation. For Adani, a former school dropout from Gujarat, Modi's western home state, the crisis presents the biggest reputational and business challenge of his life.