As the Securities and Exchange Board of India (SEBI) has confirmed starting a probe on Hindenburg reports, Adani Group on Monday sought to reassure investors saying it had strong cashflows and its business plans were fully funded.
According to a report by news agency Reuters, Adani Group’s seven listed stocks have together lost about $120 billion in market value since a January 24 report by US short-seller Hindenburg Research. The short-seller accused the conglomerate of improper use of offshore tax havens and stock manipulation, allegations the group has denied.
The turmoil continued on Monday as well, with shares in the listed companies extending their losses.
Seeking to calm investors, the Gautam Adani-led conglomerate in a statement to Reuters said the balance sheet of each of its independent portfolio companies was "very healthy", adding it had secure assets and strong cashflows, with its business plans "fully funded".
"We are confident in the continued ability of our portfolio to deliver superior returns to shareholders," Adani Group said in the emailed statement.
On Monday, Adani Group had halved its revenue growth target and planned to scale down capital spending, as reported by Bloomberg.
The Adani crisis has sparked worries of financial contagion in India, protests in parliament where lawmakers have demanded an investigation, ratings outlook downgrades of some Adani units and cast a shadow on the group's capital raising plans. Gautam Adani has also lost his crown as Asia's richest person.
Adani Group's statement said "once the current market stabilises, each entity will review its own capital market strategy."
The SEBI has been probing the market rout, including examining trade patterns and any potential irregularities in the $2.5 billion share sale of flagship firm Adani Enterprises that the group was forced to cancel due to the stock's plunge.
The market regulator confirmed the existence of the investigation for the first time in a Supreme Court filing.
"SEBI is already enquiring into both the allegations made in the Hindenburg report as well as the market activity immediately preceding and post the publication of the report," the regulator said in the filing seen by Reuters, adding the matter was in early stages of examination.
During a court hearing on Monday where the Supreme Court heard public interest petitions that raise concerns about steep investor losses, India's Solicitor General Tushar Mehta, arguing on behalf of the government and SEBI, said there was no objection if a panel was setup to examine protection mechanisms for investors. The judges told him to come back with the remit of such a panel, and scheduled a further hearing for Friday.