Indian opposition parties off planned protests over Adani crisis

People walk past a parked van with the sign of Indian conglomerate Adani in Mumbai on February 3, 2023. PHOTO AFP BENGALURU, Feb 6 Reuters - Lawmakers of India's main opposition party kicked off planned protests at some state-owned companies on Monday over the crisis at Adani group whose seven listed firms saw another sell-off that drove their market loss to $112 billion in less than two weeks.

Members of the Congress party plan to protest outside the offices of State Bank of India and Life Insurance Corporation, both of which have exposure to Adani group companies.

At one of the protest sites in Mumbai, people held up banners with the words Save SBI television footage.

READ MORE: Adani's adversity raises stakes for India and investors.

The crisis was caused by US based short-seller Hindenburg Research's Jan 24 report, which accused the Adani group of stock manipulation, unsustainable debt and use of tax havens.

The Adani group, one of India's top conglomerates, has rejected the criticism and denied wrongdoing in detailed rebuttals, but has failed to arrest the unabated fall in its shares.

In the brutal fallout of Hindenburg's report, Adani Group flagship company Adani Enterprises Ltd had to abandon a $2.5 billion share sale last week, and group chairman Gautam Adani lost his crown as Asia's richest person and slipped down the global rankings of wealthy.

The prime minister of India, Narendra Modi, and Gautam Adani are from the same state. Adani denied allegations by Modi's opponents that he had benefited from close ties, and Modi's government denied allegations of favoring Adani.

As Adani shares fell and cast a pall over Indian markets last week, lawmakers disrupted parliament and demanded an inquiry.

The stock market rout triggered a series of credit ratings warnings on Friday, with Moody's saying the group may struggle to raise capital, and S&P cutting its outlook on two group companies.

Attempts by regulators and government to calm spooked investors don't seem to be working.

The Reserve Bank of India said on Friday that the country's banking system remains stable and resilient. India's market regulators said on Saturday that the country's financial markets remain stable and continue to function in a transparent and efficient manner.

SBI said on Friday that it was not concerned about the exposure to the Adani group, but further financing to its projects would be evaluated on its own merit. India's divestment secretary Tuhin Kanta Pandey told Reuters on Friday that LIC shareholders and customers should not be concerned about its exposure to the Adani group.

LIC has a 4.23 percent equity stake in the flagship Adani Enterprises, while its other exposures include a 9.14 percent stake in Adani Ports and Special Economic Zone.

The market cap of Adani Enterprises fell 9.6 percent on Monday, taking its market cap losses to nearly $28 billion since the release of the short-seller's report.

Adani Transmission Ltd dropped 10 percent, Adani Green Energy Ltd, Adani Total Gas Ltd, Adani Power and Adani Wilmar fell about 5 percent.

Adani Ports was the only stock to buck the trend, rising 1.2 percent.