Adani Crisis: One Instance Doesn’t Indicate Governance Of Indian Markets, Says FM

New Delhi: Union Finance Minister Nirmala Sitharaman on Friday reassured investors that the Adani crisis notwithstanding, India remains a well-regulated financial market and certain instances of volatility are not indicative of how well Indian financial markets are governed.

“Our (market) regulators are normally very stringent about certain governance practices and therefore, one instance, however much talked about globally, maybe, I would think is not going to be indicative of how well Indian financial markets are governed,” Sitharaman told Network18 in an exclusive interview.

There is uncertainty in the minds of global and domestic investors about Indian market situation in the wake of massive rout in most of Adani Group stocks ever since US-based short-seller Hindenburg Research published a scathing report on the Gautam Adani headed conglomerate.

“So many lessons have been learnt over the decades and therefore, I think or regulators have kept our markets in prim and proper conditions,” said Sitharaman.

The Finance Minister also reiterated that SBI and LIC’s exposure to Adani Group stocks is well within permitted limits and still over profit even with the valuation falling.

Citing statements of SBI and LIC, Sitharaman said: “I want to recall the words… coming from the horse’s mouth has more credibility. Both SBI and LIC have issued detailed statements. And I know the chairperson or the CMD… he has himself come out and explained how they are not overexposed or whatever they said. And also said, look, we are sitting over profits for the exposure that we have which is well within the limit. That’s what I understood.”

Adani has slipped from being the second-richest person in the world to below top 10 as his fortune has plunged in a matter of one week. As much as $100 billion was knocked off market capitalisation of Adani Group’s seven Indian-listed companies.

Despite Adani Group calling off its flagship company Adani Enterprises’ fully-subscribed FPO issue, and Gautam Adani looking to calm nerves with a video message, the investors have not been fully convinced.

For the first time in 7 days, however, Adani Enterprises rebounded after its worst-ever fall to close 1.25% higher, while Adani Ports shares were up by nearly 7.5% as the BSE Sensex closed 909 points higher on Friday.