New Delhi: Amid the meteoric fall of Adani shares and the company's subsequent withdrawal of the Rs 20,000 crore follow-on public offer (FPO), the Reserve Bank of India (RBI) has asked all banks for details of their exposure to the Adani group of companies, government, and banking sources said on Thursday.
The development follows the Hindenburg Research report that has put the Adani group in a tight spot over the last week even as the company tried to portray that all was hunky dory within it. RBI must also have been prompted to step in following Credit Suisse stopping accepting bonds of Adani Group companies as collateral for loans as well as Citigroup wealth stopping extending margin loans against Adani group companies' securities.
On January 24, Hindenburg, the research firm with a track record of sending the stock prices of its targets tumbling, published its explosive report titled 'Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History'. In it, it accused the Adani Group, India's second-biggest conglomerate, of brazen stock manipulation and accounting fraud scheme.
Following the report, shares of Adani group started nosediving, a plunge that continues for the last week compelling the billionaire and Adani Group Chairman Gautam Adani to not go ahead with the fully subscribed FPO. Withdrawing the FPO, Adani called it a move aiming to "safeguard the investors".
Adani said the decision to withdraw a fully subscribed share sale of the flagship firm of his group was primarily because of volatility in the market. Adani Group company stocks have lost over USD 90 billion in value since a US short seller made damning allegations. Adani Enterprises Ltd's Rs 20,000 crore follow-on public offer managed to get investors on the last day of the share close on Tuesday. Late on Wednesday, the company decided to withdraw the FPO and refund the investors.