Rout in Adani Group stocks triggers panic sell-off in PSU banks

Published On: Wednesday, February 1, 2023 | By:

Rout in Adani Group stocks triggers panic sell-off in PSU banks

Switzerland-based investment banking company Credit Suisse has stopped accepting bonds of Adani group as collateral for margin loans to its private banking clients, a sign that scrutiny of the billionaire Gautam Adani's finances is growing after allegations of fraud by short-seller Hindenburg Research. According to the report, the Swiss lender's private banking arm has assigned a zero lending value for notes sold by Adani Ports and Special Economic Zone, Adani Green Energy, and Adani Electricity Mumbai Ltd. It had previously offered a lending value of about 75% for the Adani Ports notes. Other banks continue to lend against Adani's debt. At least two European private banks kept the level unchanged as of now, with one of those offerings to lend between 75% to 80% for Adani Ports dollar bonds.

Following the news, Adani Enterprises crashed 34.3 percent, while Adani Ports (down 25 per cent), Ambuja Cements (down 20 percent) and Adani Total Gas (down 10 percent) from the Adani group were other stocks that bled the most.Since the allegation, the bonds of the group plumbed record lows after the allegations, though they’ve since recouped some losses after Adani Enterprises Ltd. completed a $2.5 billion share sale with support from existing shareholders and institutional investors.

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