The crisis engulfing the Adani group intensified on Monday as dozens of members India’s main opposition party were detained by police during protests, and parliament was suspended again due to disruptions over the saga.
Adani shares continued their freefall, with the conglomerate’s cumulative market value loss topping $110 billion.
The crisis was triggered by U.S.-based short-seller Hindenburg Research’s Jan. 24 report that 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 that has failed to arrest the unabated fall in its shares.
In New Delhi’s Jantar Mantar, a Mughal-era observatory that doubles up as a protest site for all causes, protesters held up banners and shouted slogans against Adani group’s billionaire founder Gautam Adani. Some broke through barricades, forcing the police to detain them.
Hundreds of members of the Congress party gathered to protest across the country, including outside several offices of state-owned insurer Life Insurance Corporation (LIC) (LIFI.NS) and State Bank of India (SBI) (SBI.NS), both of which have exposure to Adani group companies.
At Jantar Mantar some members burnt a suitcase with an SBI logo on it.
Both houses of India’s parliament were adjourned on Monday, the third consecutive day, amid sloganeering and demands to launch an inquiry.
In the brutal fallout of Hindenburg’s report, Adani group flagship company Adani Enterprises Ltd (ADEL.NS) was forced 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 the wealthy.
Gautam Adani and India’s Prime Minister Narendra Modi are from the same state. Adani has denied allegations by Modi’s opponents that he had benefited from their close ties, and Modi’s government has denied allegations of favouring Adani.
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.
Even attempts by regulators and the government to calm spooked investors do not appear to be working.
The Reserve Bank of India said on Friday the country’s banking system remains resilient and stable. India’s market regulator said on Saturday the country’s financial markets remain stable and continue to function in a transparent and efficient manner.
SBI said on Friday 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.
Shares of Adani Enterprises sank 9.6% on Monday, taking its market capitalisation losses to nearly $28 billion since the release of the short-seller’s report.
Adani Transmission Ltd (ADAI.NS) dropped 10%, while Adani Green Energy Ltd (ADNA.NS), Adani Total Gas Ltd (ADAG.NS), Adani Power (ADAN.NS), and Adani Wilmar (ADAW.NS) fell roughly 5%.
Adani Ports and Special Economic Zone (APSE.NS) was the only stock to buck the trend, rising 1.2%.