Desh Ki BaatFinance

After stock crash, shareholders dumping Adani Stocks

If you’re an investor, know what to do with Adani Stocks

If you are a shareholder of Adani Stocks, the last few weeks might have been a total nightmare for you. The Hindenburg report that pointed out the irregularities going on in the Adani Enterprises has shook the stock market. A drastic downfall was seen in all seven listed Adani stocks- Adani Enterprises., Adani Green Energy, Adani Ports & SEZ, Adani Transmission, Adani Total Gas, Adani Power and Adani Wilmar.

How much has the Adani Group lost?

Before the report came out on January 24th , the group had a total evaluation of $217 billion, but after the report the capitalization stands at $99 billion. There is a whopping fall of $118 million, a number that has made Adani lose his title of the ‘third richest person in the world’. This fall happened within a period of just 10 days.

Read More- Opposition on Adani: Centre using Common man’s money to aid Adani

What about shareholders of LIC and SBI?

When the report was released, one of the biggest fears in the minds of LIC and SBI shareholders were their connections to the Adani Group. Life Insurance Corporation, the premium insurance corporation in India has an exposure of 0.975 percent of book value in the Adani Group.

The insurance company has assured the shareholders and customers that there is nothing to worry about its Adani exposure. “LIC has a well diversified portfolio and has its investments in many companies and the value of its investments keep changing. LIC is a long term investor in the market”, Department of Investment and Public Asset Management (DIPAM) Tuhin Kanta Pandey said. State Bank of India, the leading public bank in India has an exposure of Rs 27,00 crore to Adani Group or 0.8-0.9 percent of its loan book.

Speaking about the issue, Finance Minister Nirmala Sitharaman said  “I want to recall the words…coming from the horse’s mouth has more credibility. Both SBI and LIC has issued detailed statements. And I know the chairperson or the CMD… he has himself came out and explained how they are not overexposed or whatever they said. And also said, look, we are sitting over profits for the exposure that we have which is well within the limit. That’s what I understood. I read it through the media”.

What to do with Adani stocks?

The current market sentiment is all about dumping the Adani stocks, cutting the losses and moving forward. However, a slight rebound was observed in the stocks of Adani Enterprises and Adani Ports. The other stocks continued to tank, giving shareholders another reason to worry about their losses. The final call, on what to do with the stocks, has to come from an informed decision as well as careful calculation of personal risk and future of the stocks.

Read More- Adani FPO: Did the Hindenburg report make Adani cancel FPO?

Finance Minister also mentioned how the regulators in India are very strict and the investor confidence should continue. Adani Group also continues to deny the allegations made in the report and calls it a “calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.” Adani Enterprises now faces another shock, its shares will be removed from S&P Dow Jones Sustainability Indices due to alleged stock manipulation and fraud. Indian businessman who shot to fame when he surpassed Ambani to become world’s top 3 richest man, now slips to 15th position.

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Harshita Bajaj

Harshita has a background in Psychology and Criminology and is currently pursuing her PhD in Criminology. She can be found reading crime thrillers (or any other book for that matter) or binge-watching shows on Netflix when she is not in hibernation.
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