Adani Row's Impact On India's Growth Story| Has The Bleeding Stopped? | Vantage with Palki Sharma

now let's talk about the crisis at the adani group still unraveling in recent days adani has tried to ease pressure the company will pay off some loans early loans worth 1.1 billion dollars and this has helped some of the bleeding has stopped but The Rao is far from over it has spilled into the Indian Parliament yesterday Congress MP Rahul Gandhi attacked the government he questioned prime minister modi's links to Gotham adani the chairman of viadani group today the Prime Minister responded foreign instrument s positivity is and we haven't heard the last of this India will have an election next year and this political debate will only intensify in the weeks and months ahead but tonight we do not want to dwell on the politics we want to talk about the economy will the adani route impact the India growth story to answer this let's put some Basics on the table first adani is a private group adani stocks do not represent the Indian stock market India has two main exchanges the Bombay Stock Exchange or the BSE and the National Stock Exchange or the NSC now let's look at how adani is doing on both these exchanges before the crisis adani shares accounted for more than six percent on the BSC and the NSC now they've dropped to three percent in both cases adani's share was in single digits so while they fall in significantly the impact on the largest stock market will be limited those who bought adani stocks have definitely seen losses their portfolios are in the red but the rest should be fine what about the money of small investors people like you and me a lot has been said about the exposure of Banks and institutions especially state-owned entities like the State Bank of India SBI and Life Insurance Corporation of India LIC both have exposure to adani stocks what does that mean it means that they put their money and by extension our money into adani stocks Banks like the SPI have lent money to the adani group this money is the one that comes through fixed deposits it's our money and LIC has invested in adani shares again this is money that belongs to investors this money belongs to people who buy LIC savings schemes so here's a question that a lot of people are asking are all these Investments at risk let me bring you an assessment by experts Global Credit ratings agency Moody shared a report I have a copy this is what it says and I'm quoting from Moody's we estimate that their exposures to adani are not more than one percent of their total loans while we estimate that the exposures are larger for public sector Banks than for private sector Banks they are smaller than one percent of total loans for most banks one percent that is the exposure that's how much LIC and SBI will be affected one percent lic's investment in adani stands at 0.975 percent it's not even one percent so at least on this front there isn't much to worry about but what about the big picture what about the Indian economy India's Finance Minister has spoken about this let me quote from nirmala Sita Raman Foreign Exchange Reserve in the last two days has gone up by eight billion dollars neither are macro economic fundamentals nor economy's image have been affected and you could say she's part of the government of course she'll say this and you'd be right so we also looked at what industry stalwarts are saying veteran Banker Uday kotak says he doesn't see any quote-unquote systemic risk to the Indian Financial system industrialist Aaron Mahindra has advised never ever bet against India he said India ink sounds upbeat but that is not to say that there's nothing to worry about there are some obvious concerns like what happens to the projects run by the adani group will their operations be affected what about new investments will they slow down will expansion plans be put on hold Gotham adani says nothing will be impacted we will continue to focus on timely executions and delivery of projects the fundamentals of our company are very strong our balance it is healthy and assets robust our ebitda levels and cash flows have been very strong and we have an impeccable track record of fulfilling our depth obligations but this story is no longer just about adani it is also cast a spotlight on Indian Regulators like sebi the Securities and Exchange Board of India sebi sebi is India's main Market regulator it has an important role to play in keeping the markets calm it has to protect investors it has to ensure that the law is followed sebi's reputation cannot be put at risk because when it comes to regulation reputation is everything it drives Trust trust in the Indian markets and in the Indian system and trust is what foreign investors look for when they put their money in India so while the larger impact on the economy may be limited the world is watching how sebi navigates this crisis

Channel: Firstpost

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Id: 6nqCBC1pvos

Length: 6min 14sec (374 seconds)

Published: Wed Feb 08 2023